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MCOB 2A.2 Tying practices

MCOB 2A.2.1R

Except in the circumstances specified in MCOB 2A.2.2 G, MCOB 2A.2.3 R and MCOB 2A.2.4 R, neither an MCD mortgage lender nor an MCD mortgage credit intermediary may engage in any tying practice.

[Note: article 12(1) of the MCD]

MCOB 2A.2.2G

A firm will not be engaging in a tying practice where the financial service or product offered together with the MCD credit agreement cannot be offered separately as it is a fully integrated part of the credit, for example, a secured overdraft.

MCOB 2A.2.3R

An MCD mortgage lender may request the consumer, family member or close relation of the consumer to:

  1. (1)

    open or maintain a payment or a savings account, where the only purpose of the account is to accumulate capital to repay the credit, to service the credit, to pool resources to obtain the credit, or to provide additional security for the MCD mortgage lender in the event of default;

  2. (2)

    purchase or keep an investment product or a private pension product, where such product primarily offers the investor an income in retirement and also serves to provide additional security for the MCD mortgage lender in the event of default or to accumulate capital to repay the credit, to service the credit or to pool resources to obtain the credit; or

  3. (3)

    conclude a separate MCD regulated mortgage contract in conjunction with a shared equity credit agreement to obtain the credit.

[Note: article 12(2) of the MCD]

MCOB 2A.2.4R

An MCD mortgage lender may engage in tying practices where it can demonstrate to the FCA that the tied products or categories of product offered, on terms and conditions similar to each other, which are not made available separately, result in a clear benefit to the consumer taking due account of the availability and the prices of the relevant products offered on the market. This rule only applies to products which are marketed after 20 March 2014.

[Note: article 12(3) of the MCD]

MCOB 2A.2.5R

An MCD mortgage lender may require the consumer to hold a relevant insurance policy related to the MCD regulated mortgage contract but, where it does so, the MCD mortgage lender must accept an insurance policy from a supplier different to his preferred supplier where such policy has a level of guarantee equivalent to the one the MCD mortgage lender has proposed.

[Note: article 12(4) of the MCD]