3.4.1. Application

COB 3.4 applies to an Authorised Promoter in relation to the communication to a Retail Client of an Unsolicited Real Time Financial Promotion.

Guidance: Non-application to Professional Clients and Market Counterparties The restrictions on Unsolicited Real Time Financial Promotion in COB 3.4 do not apply to Professional Clients or Market Counterparties because it is expected that these categories of Client are better able to assess the risks of a Financial Product or Financial Service, including when engaging in interactive dialogue with a representative of an Authorised Firm.

3.4.2. Meaning of an Unsolicited Real Time Financial Promotion

A Financial Promotion is considered to be an Unsolicited Real Time Financial Promotion if it is made by way of interactive dialogue:

• (a) which:

(i) was not initiated by the recipient of the Financial Promotion; and

(ii) does not take place in response to an express request from the recipient of the Financial Promotion; or

• (b) in relation to which it was not clear from all the circumstances when the dialogue was initiated or requested, that during the course of the dialogue, communications would be made concerning the kind of controlled activities and controlled investments to which the communications in fact made relate.

Guidance: Examples of Unsolicited Real Time Financial Promotions An Unsolicited Real Time Financial Promotion would normally be expected to involve or require an immediate response from the recipient, such as a personal visit, interactive voice communication (including a telephone conversation), or other interactive dialogue. Unsolicited Real Time Financial Promotions are considered to present higher risks to Retail Clients and therefore require additional safeguards compared with solicited and/or non-real time Financial Promotions. Non-real time Financial Promotions include a letter, email, publication, website, television advertisement, or radio broadcast, which generally lack the interactive element and immediacy of a real time Financial Promotion.

3.4.3. No express request for a real time Financial Promotion

For these purposes, a Person is not to be treated as expressly requesting a real time Financial Promotion:

• (a) because he omits to indicate that he does not wish to engage in any or any further dialogue; or
• (b) because he agrees to standard terms that state that such dialogue will take place, unless he has signified clearly that, in addition to agreeing to the terms, he is willing for them to take place. If the dialogue is initiated or requested by a recipient (R), it is treated as also having been initiated or requested by any other person to whom it is made at the same time as it is made to R if that other recipient is a Family Member of R or expected to engage in any investment activity jointly with R.

3.4.4. Exemption for image advertising

COB 3.4 does not apply if the Financial Promotion consists only of:

• (a) the name of the Authorised Promoter;
• (b) a logo or other image associated with the Authorised Promoter;
• (c) a contact point; and
• (d) a reference to the types of Financial Product or Financial Service provided by the Authorised Promoter, or to its fees.

3.4.5. Restriction on Unsolicited Real Time Financial Promotions

An Authorised Promoter must not make an Unsolicited Real Time Financial Promotion unless the recipient is an existing Client of the Authorised Promoter and the relationship is such that the Authorised Promoter reasonably believes that:

• (a) the recipient understands the risks associated with the relevant Investment; and
• (b) the recipient would expect to be contacted by the Authorised Promoter for the purpose of communicating Financial Promotions in real time; and

3.4.6. Restriction on nature of Investments

An Unsolicited Real Time Financial Promotion must only relate to an Investment that is:

• (a) a government Security; or
• (b) a listed Security that is regularly traded on an Authorised Investment Exchange or other authorised and regulated exchange, except that it is not permitted to communicate a Financial Promotion in real time in relation to Warrants or any Security that embeds a derivative.

3.4.7. Procedure for Unsolicited Real Time Financial Promotions

An Authorised Promoter must not communicate an Unsolicited Real Time Financial Promotion to a Client who is not at the Authorised Promoter's premises, unless the Person communicating it:

• (a) only does so at an appropriate time of the day;
• (b) identifies himself and the firm he represents at the outset and makes clear the purpose of the communication;
• (c) clarifies if the Client would like to continue with or terminate the communication, and terminates the communication at any time that the Client requests it; and
• (d) gives a contact point to any Client with whom he arranges an appointment.