SRA Handbook

Interpretation

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Version 13 of the Handbook was published on 01/04/2015. For more information, please click 'History' Above

Rule 13: Interpretation

13.1

The SRA Handbook Glossary 2012 shall apply and, unless the context otherwise requires:

(a)

all italicised terms shall be defined; and

(b)

all terms shall be interpreted,

in accordance with the Glossary.

Notes

(i)

Whether a transaction is execution-only will depend on the existing relationship between the client and the firm and the circumstances surrounding that transaction. Generally, a transaction will be execution-only if the client instructs the firm to effect it without having received advice from the firm. Even though this is the case, however, the transaction may still not qualify as execution-only because, in view of the relationship, the client may reasonably expect the firm to indicate if the transaction is inappropriate. In any event, a firm may be negligent (and possibly in breach of Principle 4) if it fails to advise on the appropriateness or otherwise.

(ii)

A transaction will also be execution-only if the firm has advised the client that the transaction is unsuitable, but the client persists in wishing the transaction to be carried out. In those circumstances it is good practice (and in some cases a requirement) for the firm to confirm in writing that its advice has not been accepted, and that the transaction is being effected on an execution-only basis.

(iii)

Where the transaction involves a retail investment product, there is a specific requirement to confirm in writing the execution-only nature of a transaction (see Rule 8 above).

13.2

These rules are to be interpreted in the light of the notes.