Category: Compliance & AML · Reviewed by Matt Bartlett, Director · Founder · Last reviewed June 2026
The FCA Handbook sourcebook governing how authorised firms must deal with clients when conducting designated investment business and certain pure protection contracts arranged alongside investments.
COBS is one of two principal conduct sourcebooks in the FCA Handbook. It applies to designated investment business — broadly, regulated activities in securities, investment funds, derivatives, structured deposits and long-term insurance contracts other than pure protection. Pure general insurance distribution sits primarily under ICOBS; COBS will pick up where, for example, a firm advises on a pension transfer or sells an investment-linked life policy alongside protection cover.
COBS sits within the FCA Handbook, made under the Financial Services and Markets Act 2000 (FSMA), principally section 137A (FCA’s general rule-making power), section 137R (financial promotions) and section 138I (consultation procedure). It implements UK retained provisions originally derived from the Markets in Financial Instruments Directive (MiFID II), the Insurance Distribution Directive (IDD) for long-term insurance, and the UCITS Directive.
COBS is divided into 22 chapters. The most frequently cited for retail firms are COBS 2 (conduct of business obligations including inducements and best interests), COBS 4 (communications and financial promotions), COBS 6 (information about the firm), COBS 8 (client agreements), COBS 9 / 9A (suitability), COBS 10 / 10A (appropriateness), COBS 14 (product information), COBS 16 / 16A (reporting to clients) and COBS 19 (pension transfers and conversions). For an insurance broker like Apex that focuses on commercial and personal lines general insurance, COBS is mostly out of scope — but COBS 4 financial promotion rules can still bite where investment or pension content appears on a website hosted by the same group.
COBS interacts with the Insurance Distribution Directive rules embedded in ICOBS for long-term insurance. Where MiFID II authorisation is held, the MiFID-derived COBS provisions apply with article 24 / 25 of the Directive as the source. Equity release and home reversion plans have their own conduct rules in MCOB.
A firm authorised to advise on pension transfers must follow COBS 19 (transfer value analysis, triage, abridged advice) in addition to the general COBS 2 best interests rule and the Consumer Duty in PRIN 2A. A firm that only distributes motor and home insurance will rarely need COBS at all and should look first to ICOBS.
FCA Handbook, Conduct of Business Sourcebook (COBS). Financial Services and Markets Act 2000, sections 137A, 137R, 138I. UK retained Markets in Financial Instruments Directive (Directive 2014/65/EU). UK retained Insurance Distribution Directive (Directive (EU) 2016/97) for long-term insurance. FCA Policy Statement PS22/9 (Consumer Duty).
By Matt Bartlett, Director, on 2026-06-11.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-11. Apex Insurance Brokers Limited, FCA FRN 724952, Companies House 07014570. Not regulated advice — consult your broker on your specific position.
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