FCA Handbook - COBS 1.1 General application

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COBS 1.1 General application

Introduction

(1) COBS 1.1.1R contains the general application rule. This is the starting point for the application of this sourcebook.
(2) This section extends the general application of parts of this sourcebook to:
1. (a) certain activities relating to deposits (including structured deposits) (COBS 1.1.1AR to COBS 1.1.1AER);
2. (b) the activity of issuing electronic money (COBS 1.1.1BR); and
3. (c) auction regulation bidding (COBS 1.1.1ER).
(3) The general application of this sourcebook is further modified by:
1. (a) COBS 1 Annex 1, Part 1, in relation to certain activities of a firm (COBS 1.1.2R);
2. (b) COBS 1 Annex 1, Part 2, in relation to the location from which a firm's activities are carried on (COBS 1.1.2R); and
3. (c) individual chapters of this sourcebook (which may extend the general application of this sourcebook) (COBS 1.1.3R).
(4) The application of this sourcebook to TP firms and Gibraltar-based firms is addressed in COBS 1 Annex 2 (COBS 1.1.1CR).
(5) Further guidance on:
1. (a) the application of this sourcebook is in COBS 1 Annex 1, Part 3; and
2. (b) the interpretation of certain words and phrases used in this sourcebook is in COBS 1.4.

General application rule

This sourcebook applies to a firm with respect to the following activities carried on from an establishment maintained by it, or its appointed representative, in the United Kingdom:

(1)
[deleted]
(2)
designated investment business;
(3)
long-term insurance business in relation to life policies;

and activities connected with them.

Deposits (including structured deposits)

This sourcebook applies to a firm with respect to activities carried on in relation to deposits from an establishment maintained by it, or its appointed representative, in the United Kingdom only as follows:

	Section / chapter	Application in relation to deposits
(1)	The rules specified in COBS 1.1.1AER.	A MiFID investment firm, a third country investment firm and a MiFID optional exemption firm when selling, or advising a client in relation to, a structured deposit.
(2)	COBS 4.6 (Past, simulated past and future performance)	Communication or approval of a financial promotion relating to a structured deposit that is addressed to, or disseminated in such a way that it is likely to be received by, a retail client.
(3)	COBS 4.7 (Direct offer financial promotions)	Communication or approval of a financial promotion relating to a cash deposit ISA, cash-only lifetime ISA or cash deposit CTF that is addressed to, or disseminated in such a way that it is likely to be received by, a retail client.
(4)	COBS 4.10 Approving and confirming compliance of financial promotions)	To the extent that other rules in COBS 4 apply.
(4A)	COBS 9B (Targeted support)	Providing targeted support in relation to structured deposits.
(5)	COBS 13 (Preparing product information)	Producing a cash-deposit ISA, cash-only lifetime ISA or cash-deposit CTF.
(6)	COBS 14 (Providing product information to clients)	Selling, personally recommending or arranging the sale of a cash-deposit ISA, cash-only lifetime ISA or cash-deposit CTF to a retail client.
(7)	COBS 15 (Cancellation)	A cancellable contract between a consumer and a firm.

Structured deposits: further provisions

Except in COBS 6.2B, in the rules referred to in COBS 1.1.1AR(1) (and in any related guidance), references to:

(1)
investment services and designated investment business include selling, or advising clients in relation to, structured deposits; and
(2)
financial instruments and designated investments include structured deposits.

The rules which apply to a firm in COBS 1.1.1AR(1) when selling, or advising a client in relation to, a structured deposit:

(1) are those in the sections or provisions of this sourcebook specified in the table below which constitute UK law on markets in financial instruments; and

(2) as those rules otherwise apply to the firm in relation to MiFID, equivalent third country or optional exemption business.

COBS chapter	Description
COBS 2	Conduct of business obligations
COBS 3	Client categorisation
COBS 4	Communicating with clients, including financial promotions
COBS 6.1ZA	Information about the firm and compensation information (MiFID and insurance distribution provisions)
COBS 6.2B	Describing advice services
COBS 8A	Client agreements (MiFID provisions)
COBS 9A	Suitability (MiFID and insurance-based investment products provisions)
COBS 10A	Appropriateness (for non-advised services) (MiFID and insurance-based investment products provisions)
COBS 11.2A.34R	Best execution – MiFID provisions
COBS 11.3	Client order handling
COBS 11.4	Client limit orders
COBS 11.5A	Record keeping: client orders and transactions
COBS 11A.1	Underwriting and placing
COBS 12.2	Investment research and non-independent research
COBS 14.3A	Information about financial instruments (MiFID provisions)
COBS 16A	Reporting information to clients (MiFID and insurance-based investment products provisions)

The effect of COBS 1.1.1AER is that a rule in this sourcebook only applies to a firm when selling, or advising a client in relation to, a structured deposit for the purposes of COBS 1.1.1AR(1) if that rule:

(1) would apply to the firm in relation to MiFID, equivalent third country or optional exemption business; and

(2) derives from MiFID or its implementing measures.

Unless the context otherwise requires, reference to ‘advising’ (as that word is afforded its natural meaning) a client in relation to a structured deposit includes providing targeted support in relation to a structured deposit.

Electronic money

COBS 4.4.3 R , COBS 5 (Distance communications), COBS 15.2 (The right to cancel), COBS 15.3 (Exercising a right to cancel), COBS 15.4 (Effects of cancellation) and COBS 15 Annex 1 (Exemptions from the right to cancel) apply to a firm with respect to the activity of issuing electronic money as set out in those provisions.

Application to TP firms and Gibraltar-based firms

This sourcebook applies to TP firms and Gibraltar-based firms as specified in COBS 1 Annex 2.

COBS 1 Annex 2 also contains guidance on the application of this sourcebook to TP firms and Gibraltar-based firms.

Auction regulation bidding

COBS 5 (Distance communications) applies to a firm in relation to its carrying on of auction regulation bidding.

Modifications to the general application rule

The application of this sourcebook is modified in COBS 1 Annex 1 according to the activities of a firm (Part 1) and its location (Part 2).

The application of this sourcebook is also modified in the chapters to this sourcebook for particular purposes, including those relating to the type of firm, its activities or location, and for purposes relating to connected activities.

Firms providing investment services into Switzerland under the BFSA

COBS 6.1ZB applies only in accordance with COBS 6.1ZB.1R.

Guidance

Guidance on the application provisions is in COBS 1 Annex 1 (Part 3).

PERG 13 contains general guidance on the meaning of financial instrument, investment services and/or activities and MiFID investment firm (and of certain other kinds of investment firm).

PERG 16 contains general guidance on the businesses to which the UK provisions which implemented AIFMD apply. FUND 1 contains guidance on the types of AIFM.

Actions for damages

A contravention of a rule in this sourcebook that requires specific records to be kept for the purpose of complying with rules in SYSC 9 does not give rise to a right of action by a private person under section 138D of the Act (and each of those rules is specified under section 138D(3) of the Act as a provision giving rise to no such right of action).