Dealing and managing - COBS Provision

Note that the provisions of COBS 11.6 are currently under thematic review by the FCA. See in particular the FCA's Consultation on the Use of Dealing Commission (CP13/17) dated November 2013, for which submissions close in February 2014 and which is expected to be implemented in the Spring of 2014.

COBS 11.2 Best Execution

Note that, courtesy of 1 Annex 1 best execution obligations are not owed to an eligible counterparty, but only to a professional client or a retail client.

COBS 11.2.1 Obligation to execute orders on terms most favourable to the client

COBS 11.2.2 Application of best execution obligation

COBS 11.2.3

COBS 11.2.4

COBS 11.2.5

COBS 11.2.6 Best execution criteria

COBS 11.2.7 Role of price

COBS 11.2.19 Following specific instructions from a client

[...]

COBS 11.2.25: Consent to best execution policy generally

COBS 11.2.26: Client consent to execution policy and execution of orders outside a regulated market or MTF

Best execution criteria

COBS 11.2.6R28/02/2014

When executing a client order, a firm must take into account the following criteria for determining the relative importance of the execution factors: (1) the characteristics of the client including the categorisation of the client as retail or professional;

(2) the characteristics of the client order;

(3) the characteristics of financial instruments that are the subject of that order;

(4) the characteristics of the execution venues to which that order can be directed; and

(5) for a management company, the objectives, investment policy and risks specific to the UCITS scheme or EEA UCITS scheme, as indicated in its prospectus or instrument constituting the fund.

[Note: article 44(1) of the MiFID implementing Directive and article 25(2) second sentence of the UCITS implementing Directive]

These COBS rules may have changed as a result of MiFID II

[[COBS}} 11.6 {{Cobsprov|Use of dealing commissions]]

[[COBS}} {{Cobsprov|11.6.1]]

[[COBS}} {{Cobsprov|11.6.2]]

[[COBS}} 11.6.3 {{cobsprov|Use of dealing commission to purchase goods or services]]

[[COBS}} {{Cobsprov|11.6.4]]

[[COBS}} {{Cobsprov|11.6.5]]

[[COBS}} {{Cobsprov|11.6.6]]

[[COBS}} {{Cobsprov|11.6.7]]

[[COBS}} {{Cobsprov|11.6.8]]G - examples of goods and services that are not exempt and cannot be paid for from dealing commissions

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)).