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COBS TP 1 Transitional Provisions relating to Client Categorisation

03/01/2018
(1)(2)(3)(4)(5)(6)
 Material to which the transitional provision applies Transitional provisionTransitional provision: dates in forceHandbook provisions: coming into force
   Overview of transitional provisions for client categorisation  
1.1COBS 3G

 

  • COBS TP 1.2 contains default transitional categorisation provisions in relation to the existing clients of a firm on 1 November 2007. In many cases, they allow a client to be automatically provided with the nearest equivalent categorisation under COBS 3 to their previous categorisation.
  • COBS TP 1.3 explains how the transitional provisions for client categorisation relate to the requirement for a firm to act if it becomes aware that an elective professional client no longer satisfies the initial conditions for its categorisation.
  • The default provisions do not prevent a firm categorising such a client differently in accordance with COBS 3. COBS TP 1.4 provides guidance on how some of the procedural requirements in COBS 3 apply in some such cases.
  • COBS TP 1.5 contains transitional notification obligations, which apply if the default provisions do not allow that client to be provided with the nearest equivalent categorisation or a firm chooses not to take advantage of those provisions in relation to a client.
  • COBS TP 1.6 contains a transitional notification obligation that applies to a firm that, in relation to MiFID or equivalent third country business, takes advantage of the default transitional categorisation provisions to classify a client as a per se professional client.
  • COBS TP 1.9 contains transitional categorisation provisions in relation to clients of a firm that are taken on between 1 November 2007 and 30 June 2008 in relation to business that is not MiFID or equivalent third country business.

 

From 1 November 2007 indefinitely1 November 2007
   Categorisation of existing clients  
1.2COBS 3R

 

 

From 1 November 2007 to 2 January 20181 November 2007
   [Note: Article 71(6) of, and third paragraph of section II.2 of Annex II to, Directive 2004/39/EC of the European Parliament and of the Council]  
1.3COBS 3GUnder COBS 3.5.9 R, if a firm becomes aware that a client no longer fulfils the initial conditions that made it eligible for categorisation as an elective professional client, the investment firm must take the appropriate action. In the case of a client that has been classified as an elective professional client under COBS TP 1.2R(2)(a), the initial conditions are those that applied to the client's initial categorisation as an intermediate customer.From 1 November 2007 to 2 January 20181 November 2007
   Former inter-professional business  
1.4COBS 3GThe requirement to provide notices under COBS 3.3.1 R only applies in relation to new clients. The requirement to obtain confirmation under COBS 3.6.4 R (2) only applies in relation to prospective counterparties. These obligations are therefore not relevant to the extent that an existing client with whom a firm conducted inter-professional business before 1 November 2007 is categorised as an eligible counterparty under COBS 3 in relation to eligible counterparty business.From 1 November 2007 to 2 January 20181 November 2007
   Transitional notification obligations  
1.5COBS 3R

(1) If a firm does not categorise a client that was a private customer immediately before 1 November 2007 as a retail client, it must notify that client of its categorisation as a professional client or eligible counterparty, as appropriate, on or before that date, or if later, before conducting any further business to which COBS applies for that client.

(2) If a firm does not categorise a client that was an intermediate customer immediately before 1 November 2007 as a professional client, it must notify that client of its categorisation as a retail client or eligible counterparty, as appropriate, on or before that date, or if later, before conducting any further business to which COBS applies for that client.

(3) If a firm does not categorise a client that was a market counterparty immediately before 1 November 2007 as an eligible counterparty, it must notify that client of its categorisation as a retail client or professional client on or before that date, or if later, before conducting any further business to which COBS applies for that client.

From 1 November 2007 to 2 January 20181 November 2007
   [Note: article 28(1) of the MiFID implementing Directive]  
1.6COBS 3RIf a firm, in relation to MiFID or equivalent third country business, categorises a client who would not otherwise have been a professional client as a professional client under COBS TP 1.2(2)(b) or (3)(b), it must inform that client about the relevant conditions for the categorisation of clients. This notification must be made on or before 1 November 2007, or if later, before conducting any further business to which COBS applies for that client.From 1 November 2007 to 2 January 20181 November 2007
   [Note: article 71(6) of Directive 2004/39/EC of the European Parliament and of the Council]  
1.7 G

A notice to a professional client under COBS TP 1.6 should inform that client:

 

From 1 November 2007 to 2 January 20181 November 2007
1.8 RThe record-keeping requirements under COBS 3.8.2 R apply in relation to any client categorisations or re-categorisations made under the transitional provisions for COBS 3.From 1 November 2007 indefinitely1 November 2007
   Categorisation of new clients before 30 June (business that is not MiFID or equivalent third country business)  
1.9COBS 3RExpired