COBS 6.9 COBS 6.9 Other Dealing Rules
COBS 6.9.1 Application
Rule 6.9 does not apply to an Authorised Person with respect to any Transaction which it:(a) undertakes with a Market Counterparty; or(b) carries out for the purposes of managing a Fund of which it is the Fund Manager.
COBS 6.9.2 Churning(a) An Authorised Person must not Execute a Transaction for a Client in its discretion or advise any Client to transact with a frequency or in amounts to the extent that those Transactions have no commercial purpose other than to obtain a benefit from transaction volumes.(b) The onus will be on the Authorised Person to ensure that such Transactions were fair and reasonable at the time they were entered into.
COBS 6.9.3 Timely Execution(a) Once an Authorised Person has agreed or decided to enter into a Transaction for a Client, it must do so as soon as reasonably practical.(b) An Authorised Person may postpone the execution of a Transaction if it has taken reasonable steps to ensure that it is in the best interests of the Client.
COBS 6.9.4 Fairly and in Due Turn
An Authorised Person must deal with Own Account Transactions and Client Transactions fairly and in due turn.
COBS 6.9.5 Averaging of Prices(a) An Authorised Person may execute a series of Transactions on behalf of a Client within the same trading day or within such other period as may be agreed in writing by the Client, to achieve one investment decision or objective, or to meet Transactions which it has aggregated.(b) If the Authorised Person does so, it may determine a uniform price for the Transactions executed during the period, calculated as the weighted average of the various prices of the Transactions in the series.
COBS 6.9.6 Timely Allocation(a) An Authorised Person must ensure that a Transaction it Executes is promptly allocated.(b) The allocation must be:(i) to the account of the Client on whose instructions the Transaction was executed;(ii) in respect of a discretionary Transaction, to the account of the Client or Clients with or for whom the Authorised Person has made and recorded, prior to the Transaction, a decision in principle to execute that Transaction; or(iii) in all other cases, to the account of the Authorised Person.
COBS 6.9.7 Direct Electronic Access
Where an Authorised Person provides a Client (including a Market Counterparty) with direct electronic access to a Recognised Body or MTF, the Authorised Person must:(a) establish and maintain policies, procedures, systems and controls to limit or prevent a Client from placing an order that would result in the Authorised Person exceeding its existing position limits or credit limits; and(b) ensure that such policies, procedures, systems and controls remain appropriate and effective on an on-going basis.
An Authorised Person must undertake on-going monitoring of its systems and controls to ensure that they are operating effectively and as intended and remain appropriate.