COBS 4.5A Communicating with clients (including past, simulated past and future performance) (MiFID provisions)

1. (1) A firm must ensure that all information addressed to, or disseminated in such a way that it is likely to be received by, a retail client or a professional client including marketing communications, satisfies the conditions in (2) and COBS 4.5A.7R to COBS 4.5A.16R.
2. (2) A firm must ensure that the information in (1):
   1. (a) includes the name of the firm;
   2. (b) is accurate and always gives a fair and prominent indication of any relevant risks when referencing any potential benefits of an investment service or financial instrument;
   3. (c) uses a font size in the indication of relevant risks that is at least equal to the predominant font size used throughout the information provided, as well as a layout that ensures that such indication is prominent;
   4. (d) is sufficient for, and presented in a way that is likely to be understood by, the average member of the group to whom it is directed, or by whom it is likely to be received;
   5. (e) does not disguise, diminish or obscure important items, statements or warnings,
   6. (f) is consistently presented in the same language throughout all forms of information and marketing materials that are provided to each client, unless the client has agreed to receive information in more than one language; and
   7. (g) is up-to-date and relevant to the means of communication used.

If any information refers to a particular tax treatment, a firm must ensure that it prominently states that the tax treatment depends on the individual circumstances of each client and may be subject to change in the future.

A firm must ensure that information contained in a marketing communication is consistent with any information the firm provides to clients in the course of carrying on investment services and ancillary services.

A firm must ensure that information that contains an indication of past performance of a financial instrument, a financial index or an investment service satisfies the following conditions:

1. (1) that indication is not the most prominent feature of the communication;
2. (2) the information includes appropriate performance information which covers the preceding 5 years, or the whole period for which the financial instrument has been offered, the financial index has been established, or the investment service has been provided (where less than 5 years), or such longer period as the firm may decide, and in every case that performance information is based on complete 12-month periods;
3. (3) the reference period and the source of information are clearly stated;
4. (4) the information contains a prominent warning that the figures refer to the past and that past performance is not a reliable indicator of future results;
5. (5) if the indication relies on figures denominated in a currency other than pounds sterling, the currency is clearly stated, together with a warning that the return may increase or decrease as a result of currency fluctuations; and
6. (6) if the indication is based on gross performance, the effect of commissions, fees or other charges is disclosed.

1. A firm must ensure that information that contains an indication of simulated past performance satisfies the following conditions:
2. (1) it relates to a financial instrument or a financial index; 
3. (2) the simulated past performance is based on the actual past performance of one or more financial instruments or financial indices which are the same as, or substantially the same as, or underlie, the financial instrument concerned;
4. (3) in respect of the actual past performance referred to in (2), the conditions set out in paragraphs (1) to (3), (5) and (6) of the rule on past performance (COBS 4.5A.10R)  are complied with; and
5. (4) the information contains a prominent warning that the figures refer to simulated past performance and that past performance is not a reliable indicator of future performance.

A firm must ensure that information that contains an indication of future performance satisfies the following conditions:

1. (1) it is not based on and does not refer to simulated past performance;
2. (2) it is based on reasonable assumptions supported by objective data;
3. (3) where the information is based on gross performance, the effect of commissions, fees or other charges is disclosed;
4. (4) it is based on performance scenarios in different market conditions (both negative and positive scenarios), and reflects the nature and risks of the specific types of instruments included in the analysis; and
5. (5) it contains a prominent warning that such forecasts are not a reliable indicator of future performance.

The information must not use the name of the FCA or PRA in such a way that would indicate or suggest endorsement or approval by the FCA or PRA of the products or services of the firm.