COBS v2 and Info Disclosures Flashcards
(15 cards)
What are the COBS
A set of conduct rules implemented by the FCA to ensure the fair and professional treatment of clients.
What are the 3 types of client categories?
1) Retail
2) Professional (electvive and per se)
3) Elegible Counterparties
Who must always be categorised as a retail client?
Local authorities
How can a retail client opt up to be an elective professional client?
Meeting the quantitative and qualatative tests
What are the quantitative tests?
2 of the following 3:
1) 10 large trades per quarter (over 12 months)
2) £500k portfolio or more
3) 1+ year relevant financial services experience
List the 4 main areas of the COBS
not including client categorisation
1) Act honestly, fairly and professionally
2) Information Disclosures
3) Inducements
4) Agent as client
What information must be disclosed under COBS
(General Disclosure requirements)
1) The firm and its services
2) Investments and strategies
3) Risk warnings
4) Costs and charges
5) Venues
What are the COBS rules on inducements?
Must not take or give incentives unless:
1) It does not prevent your ability to act fairly
2) It is clearly disclosed
3) It improves the quality of service
What are the 5 areas of information disclosure within COBS
1) General Information Disclosure
2) Investment management disclosure
3) Safeguarding of assets
4) Information about the firm and its services
5) Costs and Charges
What information about the firm and its services must be provided
under COBS
1) Name, address and contact details
2) Language and method of communication
3) Authorisation details (what regulator)
4) Asset protection policy
5) Conflict of interest policy
6) Frequency of reports
What investment mangement disclosures must be made
under COBS
1) Frequency and method of valuations
2) Constraints on manager
3) Delegation of duties
4) Benchmarks
5) Objectives
6) Permitted Investments
What information regarding the safeguarding of assets must be provided
under COBS
1) If held with a third party (solvency risks)
2) If held in omnibus accounts
3) If held in non EEA jurisdictions
What information around costs and charges must be provided
All costs and charges broken down as
1) Investment services
2) Ancillary Services
3) Third party fees (e.g. platform charges)
Must be presented in both % and £ terms
More information is required when products are packaged
Under COBS, what information is required if produts are packaged
1) Availbility of products seperately
2) Cost of products seperately
3) Risks of combining the products
