FCA Handbook - COBS 9B.2 Application

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Rules

Guidance

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COBS 9B.2 Application

Who? What?

(1) This chapter (other than COBS 9B.9) applies to a firm providing targeted support in relation to:
1. (a) a designated investment other than a pure protection contract; or
2. (b) a structured deposit.
(2) COBS 9B.9 applies to a firm that is an issuer or product provider.

Notwithstanding COBS 9B.2.1R, COBS 9B.4 includes restrictions on certain types of ready-made suggestion. The effect of these restrictions is that certain types of recommendation may not be made by a firm providing targeted support.

A firm must not provide targeted support in relation to safeguarded benefits.

Providing targeted support is not permitted business of appointed representatives.

(1) This rule applies to a firm providing targeted support in relation to a type of specified investment that is beyond the scope of application of this chapter.
(2) In providing targeted support, a firm in (1) must comply with the rules which would apply to that firm if it were advising on investments.

(1) The regulated activity of providing targeted support applies to recommendations relating to securities, structured deposits and relevant investments. It therefore applies to a broader range of specified investments than those to which the rules in this chapter apply (COBS 9B.2.1R).
(2) For this reason, the Handbook distinguishes between:
1. (a) providing targeted support, which refers to the regulated activity in article 55A of the Regulated Activities Order; and
2. (b) the provision of a targeted support service, which refers to the provision of a service to which the rules in this chapter apply.
(3) The definition of personal recommendation does not include a recommendation made by a firm carrying on the regulated activity of providing targeted support other than:
1. (a) in relation to a type of specified investment to which the rules in this chapter do not apply; and
2. (b) for the purpose of the definition of investment service (and related definitions).
(4) The effect of (3), COBS 9B.2.5R and similar provisions in ICOBS 1 Annex 1 Part 2 6.1R and FPCOB 1 Annex 1 3.1R is that a firm carrying on the regulated activity of providing targeted support in relation to a type of specified investment to which the rules in this chapter do not apply must comply with the relevant rules applicable to advice on investments and the provision of personal recommendations.
(5) For example, a firm carrying on the regulated activity of providing targeted support in relation to a general insurance contract would need to comply with the rules applicable to a firm advising on investments in relation to such contracts in ICOBS.

Where?

This chapter applies in accordance with the general territorial scope of this sourcebook.

Guidance

(1) A firm may provide support to a consumer in accordance with the framework set out in this chapter but that does not amount to the firm providing a targeted support service. This may be because, for example, the suggestion made to the consumer does not involve a recommendation in relation to a particular investment.
(2) A firm providing support in the manner described in (1) should ensure that the consumer understands the nature of the support they are receiving (and see COBS 9B.6.1R(2)).
(3) Alternatively, in providing a targeted support service, a firm may specify a ready-made suggestion incorporating elements which:
1. (a) provided in isolation, would not involve the firm providing a targeted support service; and
2. (b) are sufficiently closely connected to the targeted support service as to be integral to the recommendation as a whole.
Where this is the case, the firm should consider whether it would be appropriate to treat the elements of the recommendation that do not amount to a targeted support service as forming part of the ready-made suggestion and design and deliver the full ready-made suggestion in accordance with the rules in this chapter.
(4) Firms should consider COBS 9B.4.38R when giving information in relation to pension consolidation in the course of providing a targeted support service. Firms are able to provide targeted support services where a client has multiple pension pots to support that client with a decision, or decisions, that do not rely on those pension pots being consolidated (for example, to support that client with a decision in relation to their options at retirement). The effect of COBS 9B.4.38R is that a firm must not provide information or support in relation to pension consolidation which is sufficiently closely connected to the targeted support service as to be integral to the recommendation as a whole such as to amount to an express or implied recommendation to consolidate pension pots.