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  • COB 3.3 COB 3.3 Key Information and Client Agreement

    • Application

      • COB 3.3.1

        The Rules in this section do not apply to an Authorised Firm when it is:

        (a) carrying on a Financial Service with or for a Market Counterparty;
        (b) Accepting Deposits;
        (c) Providing Credit;
        (d) carrying on an activity of the kind described in GEN Rule 2.26.1 that constitutes marketing;
        (e) a Fund Manager of a Fund Offering the Units of a Fund it manages;
        (f) Operating an Employee Money Purchase Scheme;
        (g) Acting as the Administrator of an Employee Money Purchase Scheme; or
        (h) an ATS Operator.
        Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]
        [Amended] DFSA RM68/2009 (Made 3rd January 2010). [VER17/01-10]
        [Amended] DFSA RM72/2010 (Made 11th July 2010) [VER19/07-10]
        [Amended] DFSA RMI261/2019 (Made 18th December 2019). [VER35/01-20]
        [Amended] DFSA RMI311/2021 (Made 30th June 2021). [VER39/10-21]

      • COB 3.3.2 COB 3.3.2

        (1) Subject to (2), an Authorised Firm must not carry on a Financial Service with or for a Person unless:
        (a) there is a Client Agreement containing the key information specified in App2 which is either entered into:
        (i) between the Authorised Firm and that Person; or
        (ii) in accordance with the requirements in Rule 3.3.4; and
        (b) before entering into the Client Agreement with the Person, the Authorised Firm has provided to that Person the key information referred to in (a) in good time to enable him to make an informed decision relating to the relevant Financial Service.
        (2) An Authorised Firm may provide a Financial Service to a Client without having to comply with the requirement in (1);
        (a) subject to (3), where it is, on reasonable grounds, impracticable to comply; or
        (b) where the Client has expressly agreed to dispense with the requirement in regard to a personal investment vehicle.
        (3) When (2)(a) applies, an Authorised Firm providing the Financial Service must:
        (a) first explain to the Person why it is impracticable to comply; and
        (b) enter into a Client Agreement as soon as practicable thereafter.
        Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]
        [Amended] DFSA RM149/2015 (Made 11th February 2015) [VER24/04-15]

        • COB 3.3.2 Guidance

          1. App 2 sets out the core information that must be included in every Client Agreement and additional disclosure for certain types of activities to which this chapter applies. The information content for Client Agreements with Retail Clients is more detailed than for Professional Clients.
          2. For the purposes of COB Rule 3.3.2(1)(b), an Authorised Firm may either provide a Person with a copy of the proposed Client Agreement, or give that information in a separate form. If there are any changes to the terms and conditions of the proposed agreement, the Authorised Firm should ensure that the Client Agreement to be signed with the Person accurately incorporates those changes.
          3. For the purposes of COB Rule 3.3.2(2)(a), an Authorised Firm may consider it is reasonably impracticable to provide the key information to a Person if that Person requests the Authorised Firm to execute a Transaction on a time critical basis. Where an Authorised Firm has given the explanation referred to in COB Rule 3.3.2(3)(a) verbally, it should maintain records to demonstrate to the DFSA that it has provided that information to the Client.
          Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]

    • Changes to the Client Agreement

      • COB 3.3.3

        If the Client Agreement provided to a Retail Client allows an Authorised Firm to amend the Client Agreement without the Client's prior written consent, the Authorised Firm must give at least 14 days notice to the Client before providing a Financial Service to that Client on any amended terms, unless it is impracticable to do so.

        Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]

    • Reliance on a Client Agreement made by another entity

      • COB 3.3.4

        (1) An Authorised Firm may, for the purposes of Rule 3.3.2(1)(a)(ii), rely on a Client Agreement executed in accordance with the requirements in either (2) or (3).
        (2) For the purposes of (1), an Authorised Firm which is a Branch may rely on a Client Agreement, executed by its head office or any other branch of the same legal entity, if:
        (a) the Client Agreement adequately and clearly applies to the Financial Services provided by the Branch; and
        (b) the Authorised Firm ensures that the Client Agreement is available to the DFSA on request.
        (3) For the purposes of (1), an Authorised Firm may rely on a Client Agreement, executed by a member of its Group if:
        (a) it is providing a Financial Service pursuant to Rule 2.4.5;
        (b) the Client Agreement clearly sets out:
        (i) the Financial Service provided by the Authorised Firm and;
        (ii) that the Client's rights in respect of (i) are enforceable against the Authorised Firm; and
        (c) the Authorised Firm ensures that the Client Agreement is available to the DFSA on request.
        (4) An Authorised Firm must notify the DFSA immediately if, for any reason, it is no longer able to provide unrestricted access to a Client Agreement as required under (2) or (3).
        [Added] DFSA RM149/2015 (Made 11th February 2015) [VER24/04-15]