How Can We Help?
Table of Contents
< All Topics
Print

COBS 22 – Client Reporting – Rules on Client Reporting Requirements

PostedJune 24, 2025
UpdatedJune 24, 2025
ByAndy

1. Chapter Summary

COBS 22 sets out the requirements for firms to provide clients with periodic and transactional reports relating to their investment services and activities. The chapter ensures transparency and accountability by requiring firms to give clients timely, accurate, and comprehensive information about their portfolios and transactions. This enables clients to monitor the performance and status of their investments and helps build trust and confidence in the regulated firm.

2. Applicability

COBS 22 applies primarily to firms providing investment services and managing portfolios under MiFID business, including firms dealing with retail and professional clients. Some specific reporting obligations may differ depending on client categorization, but the overall client reporting framework is broadly applicable to ensure clients receive adequate information.

3. Key Rules and Their Meaning

  • COBS 22.1.1R – Obligation to Provide Reports Firms must provide clients with reports on executed orders, portfolio holdings, and transaction details at appropriate intervals. In practice: Firms must have processes to generate and deliver clear reports covering the necessary content regularly.
  • COBS 22.2.1R – Content of Reports Reports must include essential information such as the nature and price of transactions, fees charged, and portfolio valuation. Meaning: Clients should be fully informed of the costs and outcomes associated with their investments.
  • COBS 22.3.1R – Frequency of Reporting Firms must provide periodic statements at least quarterly or more frequently if agreed with the client or required by the type of service. Nuance: More frequent reporting may be necessary for portfolio management or where regulatory requirements demand it.
  • COBS 22.4.1R – Timeliness Reports must be delivered promptly to enable clients to take informed decisions regarding their investments. In practice: Firms should have controls to avoid delays and ensure reports reflect the most recent available information.
  • COBS 22.5.1R – Format and Accessibility Reports must be presented in a durable and understandable format, accessible to the client in line with their preferences. Meaning: Firms should consider digital delivery options and ensure information clarity.

4. Interpretation Notes / FCA Expectations

  • The FCA emphasizes the importance of clarity and completeness in client reports to facilitate client understanding and engagement.
  • Firms are expected to reconcile data thoroughly to avoid errors in reporting, which could harm client trust.
  • FCA guidance highlights that client reporting should align with the complexity of the product and client sophistication.
  • Where clients receive multiple services, firms should coordinate reporting to avoid duplication and confusion.
  • The FCA expects firms to document their reporting policies and procedures and to keep records demonstrating compliance.

5. Practical Considerations for Firms

  • Develop clear client reporting policies detailing content, frequency, and delivery methods.
  • Implement automated systems to compile accurate transaction and portfolio data.
  • Provide standardized report templates that include all required disclosures and are easily understandable.
  • Establish procedures to ensure timely delivery of reports, with contingency plans for delays.
  • Maintain records of all reports sent and acknowledgments received where possible.
  • Train staff on the importance of accurate and transparent client communication.

6. Related Handbook References

  • COBS 10 – Client Communications (transparency and disclosure principles)
  • COBS 2 – Conduct of Business Sourcebook (general client treatment principles)
  • SYSC 10 – Systems and Controls (reporting controls)
  • PRIN 2A – FCA Principles for Business (client interests and communication)
  • COBS 6 – Suitability and Appropriateness (reporting linked to suitability assessments)

7. Regulatory Focus / Enforcement Risk

  • FCA enforcement often focuses on failures to provide accurate or timely client reports, especially when errors cause client losses or confusion.
  • Incomplete disclosure of fees or transaction details is a common cause of regulatory action.
  • Firms that do not maintain robust systems to reconcile portfolio data risk non-compliance.
  • The FCA also scrutinizes firms’ responsiveness to client queries about reports and complaints related to reporting.