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Status: You are viewing the version of the handbook as on 2005-06-30.

MCOB 3.3 Application: where?

Territorial Scope

MCOB 3.3.1R

This chapter applies to a firm only in relation to:

  1. (1)

    the communication of a qualifying credit promotion to a person insidethe United Kingdom;

  2. (2)

    the communication of anunsolicited real time qualifying credit promotion, unless:

    1. (a)

      it is made from a place outside the United Kingdom; and

    2. (b)

      it is made for the purposes of a business which is carried on outside the United Kingdom and which is not carried on in the United Kingdom; and

  3. (3)

    the approval of a non-real time qualifying credit promotion for communication to a person insidethe United Kingdom;

subject to MCOB 3.3.3 R(Exceptions to territorial scope: rules without territorial limitation) and MCOB 3.3.5 R(Exceptions to territorial scope: distance contracts).

MCOB 3.3.2G
  1. (1)

    The application under MCOB 3.3.1 R is relevant both when a firm communicates a qualifying credit promotion itself and when a firm approves a non-real time qualifying credit promotion for communication by others. But see also MCOB 3.3.3 R(Exceptions to territorial scope: rules without territorial limitation) regarding approvals.

  2. (2)

    The exemptions in MCOB 3.2.5 R (Application: what?; Exemptions) also incorporate some territorial elements. In particular, the exemption for financial promotions originating outside the United Kingdom (section 21(3) of the Act (Restrictions on financial promotion)) (see MCOB 3.2.5 R (4)) and the exemptions for overseas communicators (see MCOB 3.2.5 R (4)) and the exemption for incoming electronic commerce communications (see AUTH App 1.12.38 G (Incoming electronic commerce communication (article 20B)).

  3. (3)

    In the context of the provision of an electronic commerce activity to an EEA ECA recipient, the scope of MCOB 3 is extended by ECO 2.2.3 R (Financial promotion). This means that MCOB 3 will apply for communications to EEA ECA recipients.

Exceptions to territorial scope: rules without territorial limitation

MCOB 3.3.3R

Subject to MCOB 3.3.5 R the following parts of this chapter apply without any territorial limitation if a firm approves a qualifying credit promotion:

  1. (1)

    MCOB 3.1to MCOB 3.5 (Application, Purpose and General);

  2. (2)

    MCOB 3.6.3 R(1) (Non-real time qualifying credit promotions: clear, fair and not misleading); and

  3. (3)

    MCOB 3.11.1 G to MCOB 3.11.4 G (Approval of qualifying credit promotions; No approval of real time qualifying credit promotions; Approval of qualifying credit promotions when not all the rules apply).

MCOB 3.3.4G

There is no need for a qualifying credit promotion which is indicated in MCOB 3.3.1 R to be outside the territorial scope of the application of MCOB 3 to be approved before being communicated by an unauthorised person (because the restriction in section 21 of the Act (Restrictions on financial promotion) does not apply). If a firm nevertheless approves such a qualifying credit promotion, it must comply with the rules indicated in MCOB 3.3.3 R. However, a firm must not approve a real time qualifying credit promotion (see MCOB 3.11.2 R (No approval of real time qualifying credit promotions).

Exceptions to territorial scope: distance contracts

MCOB 3.3.5R
  1. (1)

    Notwithstanding MCOB 3.3.1 R and MCOB 3.3.3 R, where a firm which satisfies the conditions in (2) communicates a qualifying credit promotion, the rules in (3) do not apply.

  2. (2)

    The conditions are that:

    1. (a)

      the firm communicates the qualifying credit promotion from an establishment maintained by the firm in an EEA State other than the United Kingdom, and not from an establishment maintained by the firm in the United Kingdom or outside the EEA;

    2. (b)

      either that EEA State:

      1. (i)

        has implemented the DMD; or

      2. (ii)

        has obligations in its domestic law corresponding to those provided for by the DMD;

    3. (c)

      the qualifying credit promotion relates, exclusively, to a distance contract, for the conclusion of which the obligations provided for by the DMD (or corresponding obligations) are applied by that State; and

    4. (d)

      the firm is a national of an EEA State or a company or firm mentioned in article 48 of the Treaty.

  3. (3)

    The rules which do not apply are:

    1. (a)

      MCOB 3.6.1 R (Non-real time qualifying credit promotions: name and contact point);

    2. (b)

      MCOB 3.6.13 R (Required risk statements);

    3. (c)

      MCOB 3.6.15 R (Transient advertising);

    4. (d)

      MCOB 3.6.26 R (Multi-rate mortgages);

    5. (e)

      MCOB 3.6.27 R (Fees for advice or arranging); and

    6. (f)

      MCOB 3.8.2 R (3) and (4) (Form and content of real time qualifying credit promotions).

Meaning of 'communicated to a person inside or outside the United Kingdom'

MCOB 3.3.6R

For the purposes of this chapter:

  1. (1)

    a qualifying credit promotion is communicated to a person outside the United Kingdom if it is:

    1. (a)

      made to a person who receives it outside the United Kingdom; or

    2. (b)

      directed only at persons outside the United Kingdom; and

  2. (2)

    a qualifying credit promotion is communicated to a person inside the United Kingdom if it is communicated to a person other than as described in (1);

and see MCOB 3.3.7 R and MCOB 3.5.6 R which amplify this rule.

MCOB 3.3.7R

Meaning of "'directed only at persons outside the United Kingdom'

  1. (1)

    If the conditions set out in 4(a), (b), (c) and (d) are met, a qualifying credit promotion directed from a place inside the United Kingdom will be regarded as directed only at persons outside the United Kingdom.

  2. (2)

    If the conditions set out in 4(c) and (d) are met, a qualifying credit promotion directed from a place outside the United Kingdom will be regarded as directed only at persons outside the United Kingdom.

  3. (3)

    In any other case, where one or more of the conditions in 4(a) to (e) is met, that fact will be taken into account in determining whether a qualifying credit promotion is directed only at persons outside the United Kingdom (but a qualifying credit promotion may still be regarded as directed only at persons outside the United Kingdom even if none of these conditions is met).

  4. (4)

    The conditions are that:

    1. (a)

      the qualifying credit promotion is accompanied by an indication that it is directed only at persons outside the United Kingdom;

    2. (b)

      the qualifying credit promotion is accompanied by an indication that it must not be acted upon by persons in the United Kingdom;

    3. (c)

      the qualifying credit promotion is not referred to in, or directly accessible from, any other qualifying credit promotion which is made to a person or directed at persons in the United Kingdom by or on behalf of the same person;

    4. (d)

      there are in place proper systems and procedures to prevent recipients in the United Kingdom (other than those to whom the qualifying credit promotion might otherwise lawfully have been made) obtaining the qualifying credit to which the qualifying credit promotion relates, from the person directing the qualifying credit promotion, a close relative of his or a member of the same group;

    5. (e)

      the qualifying credit promotion is included in:

      1. (i)

        a website, newspaper, journal, magazine or periodical publication which is principally accessed in or intended for a market outside the United Kingdom; and

      2. (ii)

        a radio or television broadcast or teletext service transmitted principally for reception outside the United Kingdom.