Our conduct of business rules impose disclosure requirements on firms when selling certain retail investment products (there are also similar obligations when selling mortgages and general insurance).

These disclosures typically cover details of the service the firm offers and the cost of this service.

Financial advisers are required to provide information to their clients about their status, the nature of their advice and how they are paid.

In August 2008, a new disclosure document – the services and costs disclosure document (SCDD) was introduced into COBS guidance, replacing the initial disclosure document (IDD) and Menu.

Firms now have a number of options regarding initial disclosure.  Essentially these include:

• developing their own disclosure material giving careful consideration to the rule-based requirements in relation to their own business models; or
• using the SCDD or the combined initial disclosure document (CIDD), which will allow them to satisfy a number of COBS requirements; or
• continue using the IDD and menu until the end of the transitional period on 31 August 2009.

Regardless of which option firms choose, they will need to ensure that they communicate information to clients in a way which is fair, clear and not misleading.
For firms who wish to use the SCDD or CIDD, the following resources may be of assistance  These resources are designed to be used together with the Notes in the relevant COBS 6 Annex (SCDD: COBS 6 Annex 1G [PDF], CIDD: COBS 6 Annex 2 [PDF] – so firms will need to refer to the Notes when drafting their documents.  The Notes provide important information and instructions to help firms complete their document properly and to ensure it complies with our rules.