FCA suitability rules

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • FCA suitability rules
  • Background to FCA suitability requirements
  • Application of the suitability obligation for activities other than those relating to MiFID and IBIP business
  • Application of suitability requirements for MiFID activities and distribution of IBIPs
  • Assessing suitability for non-MiFID and non-IBIP activities
  • Assessing suitability: necessary information
  • Assessing suitability: knowledge and experience
  • Client’s financial situation
  • Investment objectives
  • Reliance on information
  • More...

FCA suitability rules

BREXIT: 11pm (GMT) on 31 December 2020 (‘IP completion day’) marked the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. Following IP completion day, key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see: Brexit and financial services: materials on the post-Brexit UK/EU regulatory regime.

Background to FCA suitability requirements

This Practice Note looks at the suitability rules of the Financial Conduct Authority (FCA). For specific guidance on establishing the risk a customer is willing and able to take and making a suitable investment selection, see Practice Note: Establishing risk and suitable investment selections.

The conduct of business rules in relation to investment business can be found in the FCA Handbook in the Conduct of Business sourcebook (COBS). In 2006, the FCA's predecessor, the Financial Services Authority (FSA) reformed COBS to implement the Markets in Financial Instruments Directive (Directive 2004/39/EC) (MiFID). MiFID has been replaced by the recast Markets in Financial Instruments Directive (Directive 2014/65/EU) (MiFID II Directive) and the Markets in Financial Instruments Regulation (Regulation (EU) 600/2014) (MiFIR) (together with the MiFID II framework). Both the MiFID II Directive and MiFIR entered into force on 2 July 2014. As amended, the majority of the MiFID II

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