the United Kingdom; or
at the time that the regulated mortgage activity is carried on.
either the EEA State:
has implemented the DMD; or
has obligations in its domestic law corresponding to those provided for by the DMD;
The rules which do not apply are:
MCOB 4.4 (Initial disclosure requirements);
MCOB 4.5 (Additional disclosure for distance mortgage mediation contracts with retail customers);
MCOB 4.6 (Cancellation of distance mortgage mediation contracts);
MCOB 5 (Pre-application disclosure);
MCOB 6 (Disclosure at offer stage);
MCOB 8.4 (Initial disclosure requirements: home reversion schemes);
MCOB 9.3 (Pre-application disclosure);
MCOB 9.4 (Content of illustrations); and
MCOB 9.5 (Disclosure at offer stage for lifetime mortgages).
Parts of MCOB relate to distance contracts (or distance mortgage mediation contracts) with retail customers. These expressions are derived from the Distance Marketing Directive, and the following paragraphs provide some guidance to firms on their meaning:
The Distance Marketing Directive applies for distance contracts with 'any natural person who is acting for purposes which are outside his trade, business or profession', for which the term 'retail customer' has been adopted. Examples of individuals who would be regarded as retail customers include:
To be a distance contract, a contract must be concluded under an 'organised distance sales or service-provision scheme' run by the contractual provider of the service who, for the purpose of the contract, makes exclusive use (directly or through an intermediary) of one or more means of distance communication up to and including the time at which the contract is concluded. So:
the firm must have put in place facilities designed to enable a customer to deal with it exclusively at a distance, such as facilities for a customer to deal with it purely by post, telephone, fax or the Internet. If a firm normally operates face-to-face and has no facilities in place enabling a customer to deal with it customarily by distance means, the DMD will not apply. A one-off transaction effected exclusively by distance means to meet a particular contingency or emergency will not be a distance contract; and
there must have been no simultaneous physical presence of the firm and the other party to the contract throughout the offer, negotiation and conclusion of the contract. So, for example, contracts offered, negotiated and concluded over the Internet, through a telemarketing operation, or by post will normally be distance contracts.
The mere fact that an intermediary (acting for the supplier or for the retail customer) is involved, does not make the sale of a financial product or service a distance contract. There will not be a distance contract if there has been simultaneous physical presence of the intermediary and the retail customer at some stage in the offer, negotiation and conclusion of the contract.1