Rule on Inducements - COBS Provision: Difference between revisions

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In a nutshell:
In a nutshell:
{{box|
{{box|
{{fcaprov|2.3.1}} A {{fcaprov|firm}} must not pay/accept any fee or give/receive any other benefit in relation to business carried on for a {{fcaprov|client}} other than:
{{fcaprov|2.3.1}} A {{fcaprov|firm}} must not give or receive any fee, commission or non-monetary benefit ('''benefit''') in relation to business carried on for a {{fcaprov|client}} other than:
:(1) '''Client Fees''': a fee paid to or by the client; or
:(1) '''Client Benefits''': a benefit paid to or by the client; or
:(2) '''Third Party Fees''': a fee paid or provided to or by a third party if:
:(2) '''Third Party Benefits''': a benefit paid or provided to or by a third party if:
::(a) '''No impairment''': it does not impair the firm's duty to act in the client’s best interests; and
::(a) '''No impairment''': it does not impair the firm's duty to act in the client’s best interests; and
::(b) '''Full disclosure''': it is clearly and comprehensively disclosed to the client before providing the service; and
::(b) '''Full disclosure''': it is clearly and comprehensively disclosed to the client before providing the service; and
::(c) '''Service enhancement''': the fee is designed to enhance the quality of the service to the client; or  
::(c) '''Service enhancement''': the benefit is designed to enhance the quality of the service to the client; or  
:(3) '''Ancillary fees''': fees which enable designated investment business or ancillary services, such as custody costs, exchange fees, regulatory levies or legal fees, and which cannot give rise to conflicts with a clients’ best interests.
:(3) '''Ancillary Benefits''': benefits which enable designated investment business or ancillary services, such as custody costs, exchange fees, regulatory levies or legal fees, and which cannot give rise to conflicts with a clients’ best interests.
}}
}}


Revision as of 08:40, 29 May 2015

In a nutshell:

2.3.1 A firm must not give or receive any fee, commission or non-monetary benefit (benefit) in relation to business carried on for a client other than:

(1) Client Benefits: a benefit paid to or by the client; or
(2) Third Party Benefits: a benefit paid or provided to or by a third party if:
(a) No impairment: it does not impair the firm's duty to act in the client’s best interests; and
(b) Full disclosure: it is clearly and comprehensively disclosed to the client before providing the service; and
(c) Service enhancement: the benefit is designed to enhance the quality of the service to the client; or
(3) Ancillary Benefits: benefits which enable designated investment business or ancillary services, such as custody costs, exchange fees, regulatory levies or legal fees, and which cannot give rise to conflicts with a clients’ best interests.


Section 2.3.1, COBS Rules

COBS Rules
Template:COBS Section 2.3.1
View Template

Commentary

See also

Conduct of Business

This is an article about the FCA’s conduct of business rules, known by its chapter in the FCA Sourcebook, COBS, which implement, among other things, MiFID (directive 2004/39/EC (EUR Lex) and implementing directive 2006/73/EC (EUR Lex)).

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