Use of dealing commission to purchase goods or services - COBS Provision

11.6.3 Use of dealing commission to purchase goods or services

(1) An investment manager must not accept goods or services in addition to the execution of its customer orders if it:

(a) executes its customer orders through a broker or another person;

(b) passes on the broker's or other person's charges to its customers; and

(c) is offered goods or services in return for the charges referred to in (b).

(2) This prohibition does not apply if the investment manager has reasonable grounds to be satisfied that the goods or services received in return for the charges:

(a)

(i) are related to the execution of trades on behalf of the investment manager's customers; or

(ii) comprise the provision of research; and

(b) will reasonably assist the investment manager in the provision of its services to its customers on whose behalf the orders are being executed and do not, and are not likely to, impair compliance with the duty of the investment manager to act in the best interests of its customers.

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)).