COBS 13

Preparing product information

COBS 13.1

The obligation to prepare product information

COBS 13.1.1

See Notes

handbook-rule

A firm must prepare:

  1. (1) a key features document for each packaged product, cash-deposit ISA and cash-deposit CTF it produces; and
  2. (2) a key features illustration for each packaged product it produces;
in good time before those documents have to be provided.

COBS 13.1.2

See Notes

handbook-rule

A firm must prepare the Consolidated Life Directive information for each life policy it effects, in good time before that information has to be provided.
in good time before that information has to be provided.

[Note: article 36(1) of, and Annex III to, the Consolidated Life Directive]

Exceptions

COBS 13.1.3

See Notes

handbook-rule

A firm is not required to prepare:

  1. (1) a document, if another firm has agreed to prepare it; or
  2. (2) a key features document for:
    1. (a) a unit in a simplified prospectus scheme; or
    2. (b) a unit in an EEA simplified prospectus scheme; or
    3. (c) a unit in a key features scheme, if it prepares a simplified prospectus, or the information appears with due prominence in another document, instead; or
    4. (d) a stakeholder pension scheme, or personal pension scheme that is not a personal pension policy, if the information appears with due prominence in another document; or
  3. (3) a key features illustration, if it includes the information from the key features illustration in a key features document; or
  4. (4) the Consolidated Life Directive information, if the policy is a reinsurance contract or a pure protection contract.

COBS 13.1.4

See Notes

handbook-rule
A single document prepared for more than one key features scheme, simplified prospectus scheme or EEA simplified prospectus scheme may combine more than one key features document, simplified prospectus or EEA simplified prospectus or any combination of them, if the schemes are offered through a funds supermarket service and the document clearly describes the difference between the schemes.

COBS 13.2

Product information: production standards, form and contents

COBS 13.2.1

See Notes

handbook-guidance

When a firm prepares documents or information in accordance with this chapter, the firm should consider the rules on providing product information (COBS 14). Those rules require a firm to provide the product information in a durable medium or via a website that meets the website conditions (if the website is not a durable medium).

[Note: article 29(4) of the MiFID implementing Directive]

COBS 13.2.2

See Notes

handbook-rule

A key features document and a key features illustration must also:

  1. (1) (if it is a key features document) be produced and presented to at least the same quality and standard as the sales or marketing material used to promote the relevant product;
  2. (2) (if it is a key features document) display the firm's brand at least as prominently as any other;
  3. (3) (if it is a key features document or a key features illustration which does not form an integral part of the key features document) include the 'keyfacts' logo in a prominent position at the top of the document; and
  4. (4) (if it is a key features document or a key features illustration which does not form an integral part of the key features document) include the following statement in a prominent position:
"The Financial Services Authority is the independent financial services regulator. It requires us, [provider name], to give you this important information to help you to decide whether our [product name] is right for you. You should read this document carefully so that you understand what you are buying, and then keep it safe for future reference".

COBS 13.2.3

See Notes

handbook-guidance

COBS 13.2.4

See Notes

handbook-rule
The documents and information prepared in accordance with the rules in this chapter must not include anything that might reasonably cause a retail client to be mistaken about the identity of the firm that produced, or will produce, the product.

COBS 13.3

Contents of a key features document

General requirements

COBS 13.3.1

See Notes

handbook-rule

A key features document must:

  1. (1) include enough information about the nature and complexity of the product, how it works, any limitations or minimum standards that apply and the material benefits and risks of buying or investing for a retail client to be able to make an informed decision about whether to proceed; and
  2. (2) explain:
    1. (a) the arrangements for handling complaints about the product;
    2. (b) that compensation might be available from the FSCS if the firm cannot meet its liabilities in respect of the product (if applicable);
    3. (c) that a right to cancel or withdraw exists, or does not exist, and, if it does exist, its duration and the conditions for exercising it, including information about the amount a client may have to pay if the right is exercised, the consequences of not exercising it and practical instructions for exercising it, indicating the address to which any notice must be sent;
    4. (d) (for a CTF) that stakeholder CTFs, cash-deposit CTFs and security-based CTFs are available and which type the firm is offering; and
    5. (e) (for a personal pension scheme) clearly and prominently, that stakeholder pension schemes are generally available and might meet the client's needs as well as the scheme on offer.

Additional requirements for packaged products

COBS 13.3.2

See Notes

handbook-rule
Table

COBS 13.4

Contents of a key features illustration

COBS 13.4.1

See Notes

handbook-rule

A key features illustration must include appropriate charges information and, if it is a packaged product which is not a financial instrument:

  1. (1) must include a standardised deterministic projection;
  2. (2) the projection and charges information must be consistent with each other;
  3. (3) it may also include alternative projections except that the most prominent projection must be a standardised deterministic projection.

Exceptions

COBS 13.4.2

See Notes

handbook-rule

A key features illustration must not include a generic projection unless:

  1. (1) there are reasonable grounds for believing that that projection will be sufficient to enable a retail client to make an informed decision about whether to invest; or
  2. (2) it is a direct offer financial promotion.

COBS 13.4.3

See Notes

handbook-guidance
A generic projection is unlikely to be sufficient to enable a retail client to make an informed decision about whether to invest if the premium or investment returns on the product will be materially affected by the personal characteristics of the investor.

COBS 13.4.4

See Notes

handbook-rule

There is no requirement to include a projection in a key features illustration:

  1. (1) for a single premium life policy bought as a pure investment product, a product with benefits that do not depend on future investment returns or any other product if it is reasonable to believe that a retail client will not need one to be able to make an informed decision about whether to invest; or
  2. (2) if the product is:
    1. (a) a SIPP from which no income withdrawals are being taken; or
    2. (b) a life policy that will be held in a CTF or sold with basic advice (unless the policy is a stakeholder pension scheme).

COBS 13.4.5

See Notes

handbook-guidance
Although there may be no obligation to include a projection in a key features illustration, where a firm chooses to include one, the projection must follow the appropriate requirements, as outlined in this section, or for financial instruments under COBS 4.6.7 R.

COBS 13.5

Preparing product information: other projections

Projections for in-force products

COBS 13.5.1

See Notes

handbook-rule

A firm that communicates a projection for an in-force packaged product which is not a financial instrument:

  1. (1) must include a standardised deterministic projection;
  2. (2) may also include an alternative projection except that the most prominent projection must be a standardised deterministic projection; and

must follow the projection rules in COBS 13 Annex 2.

Projections: other situations

COBS 13.5.2

See Notes

handbook-rule

A firm that communicates a projection for a packaged product which is not a financial instrument,

  1. (1) for which a key feature illustration is not required to be provided; and
  2. (2) which is not an in-force packaged product;

must ensure that such a projection is either a standardised deterministic projection or an alternative projection in accordance with COBS 13 Annex 2.

Exceptions to the projection rules: projections for more than one product

COBS 13.5.3

See Notes

handbook-rule
A firm that communicates a projection of benefits for a packaged product which is not a financial instrument, as part of a combined projection where other benefits being projected include those for a financial instrument or structured deposit, is not required to comply with the projection rules in COBS 13.4, COBS 13.5 and COBS 13 Annex 2 to the extent that it complies with the future performance rule (COBS 4.6.7 R).

COBS 13.5.4

See Notes

handbook-guidance
The general requirement that communications be fair, clear and not misleading will nevertheless mean that a firm that elects to comply with the future performance rule in COBS 4.6.7 R will need to explain how the combined projection differs from other information that has been or could be provided to the client, including a projection provided under the projection rules in COBS 13.4, COBS 13.5 and COBS 13 Annex 2.

COBS 13 Annex 1

The Consolidated Life Directive Information

See Notes

handbook-rule
This annex belongs to COBS 13.1.2 R (The Consolidated Life Directive Information)

COBS 13 Annex 2

Projections

This annex belongs to COBS 13.4.1 R (Contents of a key features illustration), COBS 13.5.1 R (Projections for in-force products) and COBS 13.5.2 R (Projections: other situations).

COBS 13 Annex 3

Charges


This annex belongs to COBS 13.4.1 R (Contents of a key features illustration)

2.2 The effect of charges table:
(1) for a life policy, personal pension scheme or stakeholder pension scheme must be in the following form: (2) for any other packaged product must be in the following form: (3) must be completed in accordance with the following notes: