Which firms are exempt from the Conduct of Business Sourcebook (COBS)?

The correct answer identifies that Investment Companies with Variable Capital (ICVCs) are exempt from certain aspects of the Conduct of Business Sourcebook (COBS), which includes limited compliance requirements. This stems from the regulatory framework that distinguishes between different types of firms based on their structure and the nature of their operations.

ICVCs are regarded as collective investment schemes that generally have simplified compliance expectations due to their nature of operating primarily on behalf of investors in a pooled manner. They are subject to specific regulations that can differ from those applied to more traditional investment firms, which are involved in continuous advisory or transaction-based activities. Thus, while ICVCs must uphold certain standards, they are afforded exemptions within COBS, reflecting their distinct operational framework.

The other options suggest that all authorized firms, only international firms, or none at all would be exempt from COBS. However, this is not accurate as there are specific categories within the regulatory structure, such as ICVCs, that have tailored compliance requirements. Recognizing these distinctions is crucial for understanding regulatory obligations in the financial services sector.