Versions

 

Fee Disclosure for Retail Clients trading in Restricted Speculative Investments

1. An Authorised Firm is required, as part of the core information that is included in the Client Agreement under COB App A2.1.2, to disclose all of the detailed fees and charges which a Retail Client will or may incur. An Authorised Firm that Deals in a Restricted Speculative Investment would therefore be expected to disclose under that Rule:
(a) any trading commissions charged, whether a general commission or a commission on each trade, e.g. on the opening and closing of a trading account;
(b) if the Authorised Firm adds any mark-up to market prices it receives from an external source, thereby increasing the spread for the Retail Client, the amount of that mark-up or, if the amount cannot be pre-determined, a reasonable range specified as precisely as possible for the relevant class of Restricted Speculative Investments that are being offered;
(c) any financing charges that are applicable, e.g. daily and overnight financing charges for Restricted Speculative Investments;
(d) if the Authorised Firm adds a mark-up when calculating any financing charges, the amount of that mark-up; and
(e) any applicable costs and charges to be applied if the Retail Client is seeking to sell or exit early.
2. If any material changes are proposed to fees and charges that have been previously disclosed in the Client Agreement, a new fee disclosure statement needs to be given to the Retail Client before making the changes to the fees and charges (see also COB Rule 3.3.3).
3. An Authorised Firm providing other Financial Services relating to a Restricted Speculative Investment is also required to disclose the fees, charges and commissions relating to those services.
Derived from DFSA RMI299/2021 (Made 21st April 2021). [VER38/09-21]