What is the FCA’s Conduct of Business Sourcebook (COBS)?
The U.K. Financial Conduct Authority’s (FCA) Conduct of Business Sourcebook (COBS), which came into force in November 2007, is part of the business standards portion of the FCA Handbook, a consolidated document containing a complete record of FCA legal instruments.
COBS establishes that a firm must act “honestly, fairly and professionally in accordance with the best interests of its client.” In relation to a firm’s eligible counterparty business, the firm must act “honestly, fairly and professionally, taking into account the nature of the eligible counterparty and its business.”
What does COBS cover?
COBS outlines conduct rules for a broad range of business activities, including:
- Client communications and financial promotions
- Client agreements (MiFID and non-MiFID)
- Suitability and appropriateness assessments
- Disclosure and product information requirements
- Periodic client reporting
- Recordkeeping obligations
Together, these standards promote transparency, consumer protection, and market integrity.
Who must comply with COBS?
COBS applies to firms conducting any of the following activities from an establishment in the United Kingdom or through an appointed representative:
- Designated investment business
- Long-term insurance business relating to life policies
- Any activity connected with the above
For specific exclusions and modifications, see FCA Handbook, COBS 1, Annex 1.
What are the recordkeeping requirements under COBS?
COBS details 59 subjects of record that firms must create, maintain, and retain — covering:
- The contents of each record
- Timing of when records must be made
- Retention periods for each record type
Note: The number of subjects of record continues to change over time. For the most up-to-date number, reference the FCA Handbook.
Firms should refer to COBS to see the latest list of recordkeeping requirements. However, Telephone and electronic communications recording obligations are no longer within COBS. Those can be found in SYSC 10A.
How Smarsh helps firms meet FCA COBS requirements
Smarsh offers an end-to-end platform of AI-powered compliance solutions designed to streamline compliance processes, reduce manual workloads, and ensure adherence to regulatory requirements.
With Smarsh, you can:
- Capture every conversation: Archive communications across all major channels (email, messaging, voice, social, mobile) for complete visibility and compliance.
- Detect more real risk with AI: Use machine learning and customizable risk scenarios to surface suitability concerns, reduce false positives, and flag misconduct faster.
- Customize and test supervision models: Build and refine risk detection logic with no-code tools like Scenario Builder and Scenario Evaluator.
- Scale with confidence: Trusted by global financial firms, Smarsh helps you meet regulatory expectations while managing growing communication volumes.
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Related FCA Resources
Frequently asked questions
The Financial Conduct Authority’s (FCA) Conduct of Business Sourcebook (COBS) sets the standards firms must follow when conducting investment and insurance business in the U.K. It covers client communication, suitability, disclosure, reporting, and recordkeeping requirements designed to ensure firms act honestly, fairly, and professionally in the best interests of clients.
COBS applies to firms carrying out designated investment business, long-term insurance business relating to life policies, and related activities from an establishment in the United Kingdom or through an appointed representative. Certain exclusions and modifications are listed in COBS 1 Annex 1 of the FCA Handbook.
COBS outlines 59 subjects of record that firms must create and retain, specifying what each record should contain, when it must be made, and how long it should be kept. Firms should consult the FCA Handbook for the latest list, as requirements may change over time.
COBS sets general conduct and recordkeeping standards for firms, while SYSC 10A specifically covers recording of telephone and electronic communications. The FCA moved these rules from COBS to SYSC 10A to centralize communication recording requirements.
Smarsh offers an AI-powered compliance platform that captures and archives digital communications, detects risk through machine learning, and automates supervision workflows. These tools help financial institutions meet FCA COBS recordkeeping and communication obligations while reducing manual review and ensuring audit-ready compliance.