Conduct of Business and Providing Product Information to Clients COBS 14 | Mortgage Conduct of Business MCOB | Template for FCA Applications and Authorised Firms

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Providing Product Information to Clients (COBS 14)

[*DELETE if this COBS regulation does not apply to your business type]

The company confirms that we comply with the COBS 14 regulations and have controls and procedures in place to ensure that where we sell: –

[*delete as applicable]

• a packaged product to a retail client, we always provide a key features document and a key features illustration to that client
• a life policy that is not a reinsurance contract to a client, we always provide the Consolidated Life Directive information to that client
• the variation of a life policy or personal pension scheme to a retail client, we always provide that client with sufficient information about the variation for the client to be able to understand the consequences of the variation
• the variation of a personal pension scheme to a retail client, which involves an election by the client to make income withdrawals or a purchase of a short-term annuity, we always provide that client with such information as is necessary for the client to understand the consequences of the variation, including if relevant, the information required by COBS 13 Annex 2.2.9 R
• a cash-deposit ISA or cash-deposit CTF to a retail client, we always provide a key features document to that client
• a unit in a simplified prospectus scheme to a client, we always offer the scheme’s current simplified prospectus to that client. In addition, if the client is a retail client present in the EEA, we always provide the simplified prospectus to the client together with: –

• • enough information for the client to be able to make an informed decision about whether to hold the units in a wrapper
  • information about the three types of CTF that are generally available (stakeholder CTFs, cash-deposit CTFs and security-based CTFs), and the type of CTF that we are offering (if the units will, or may, be held in a CTF)

• a unit in a UCITS scheme, or in an EEA UCITS scheme which is a recognised scheme, to a client, we always: –

• • provide a copy of the scheme’s key investor information document or, as the case may be, EEA key investor information document to that client

• where the client is a retail client, provide separately (unless already provided) the information required by COBS 13.3.1R (2)

[INSERT your European Standardised Information Sheet (ESIS) Document if applicable]

All product information materials, text and Key Feature documents have been developed and reviewed to ensure that they conform in accordance with the rules of section COBS 14.2.4 of the FCA Handbook. This ensures that we never do, write or propose anything that might reasonably cause a retail client to be mistaken about the identity of who we are, what we have produced, or will produce, or about the product.

[The below is applicable to Designated Investments ONLY – *delete if not applicable]

The company confirms that we always provide a client with a general description of the nature and risks of designated investments, considering, in particular, the client’s categorisation as a retail client or a professional client.

Where applicable, we always ensure that the description must: –

• explain the nature of the specific type of designated investment concerned, as well as the risks particular to that specific type of designated investment, in sufficient detail to enable the client to take investment decisions on an informed basis
• include, where relevant to the specific type of designated investment concerned and the status and level of knowledge of the client, the following elements: –

• • the risks associated with that type of designated investment including an explanation of leverage and its effects and the risk of losing the entire investment
  • the volatility of the price of designated investments and any limitations on the available market for such investments
  • the fact that an investor might assume, as a result of transactions in such designated investments, financial commitments and other additional obligations, including contingent liabilities, additional to the cost of acquiring the designated investments
  • any margin requirements or similar obligations, applicable to designated investments of that type

[The below is applicable to P2P Agreements ONLY – *delete if not applicable]

Where the company provides P2P agreements, we have pre-agreement disclosure documents that provides the client with information regarding the specific nature and risks of the P2P agreement.

This information includes: –

• The expected and actual default rates in line with the requirements in COBS 4.6 on past and future performance
• A summary of the assumptions used in determining expected future default rates
• A description of how loan risk is assessed, including a description of the criteria that must be met by the borrower before the firm considers the borrower eligible for a P2P agreement
• Where lenders have the choice to invest in specific P2P agreements, details of the creditworthiness assessment of the borrower carried out
• Whether the P2P agreement benefits from any security and if so, what
• A fair description of the likely actual return, considering fees, default rates and taxation
• An explanation of how any tax liability for lenders arising from investment in P2P agreements would be calculated
• An explanation of our procedure for dealing with a loan in late payment or default
• The procedure for a lender to access their money before the term of the P2P agreement has expired
• An explanation of what will happen if we fail, including confirmation that there is no recourse to the Financial Services Compensation Scheme

[INSERT your Pre-P2P Agreement Information Document if applicable]