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MCOB 3A.1 1Application and purpose

Who?

MCOB 3A.1.1 R
MCOB 3A.1.2 G

As a result of this chapter and CONC 3:

  1. (1)

    a financial promotion is not subject to CONC 3to the extent that it relates to qualifying credit; and

  2. (2)

    where a firm makes a communication which consists of a financial promotion of qualifying credit and a financial promotion of a different form of lending that is not qualifying credit (for example, an unsecured personal loan), the content of the latter will need to comply with CONC 3.

Authorised professional firms

MCOB 3A.1.3 R
  1. (1)

    Except for MCOB 3A.5, MCOB 3A does not apply to an authorised professional firm in relation to the communication of a financial promotion if the following conditions are satisfied:

    1. (a)

      the firm's main business must be the practice of its profession;

    2. (b)

      the financial promotion must be made for the purposes of, and incidental to, the promotion or provision by the firm of:

      1. (i)

        its professional services; or

      2. (ii)

        its non-mainstream regulated activities (see PROF 5.2 (Nature of non-mainstream activities)); and

    3. (c)

      the financial promotion must not be communicated on behalf of another person who would not be able lawfully to communicate the financial promotion if they were acting in the course of business.

  2. (2)

    in (1)(a), a firm's professional business practice is not the “main business” of the firm unless the proportion of income it derives from professional fees is, during its annual accounting period, at least 50% of the firm's total income (a temporary variation of not more than 5% may be disregarded for this purpose).

  3. (3)

    in (1)(b)(i), “professional services” means services:

    1. (a)

      which do not constitute a regulated activity; and

    2. (b)

      the provision of which is supervised and regulated by a designated professional body.

Application for a financial promotion of qualifying credit

MCOB 3A.1.4 R

This chapter applies to the communication or approval of a financial promotion of qualifying credit as follows:

Application and purpose

MCOB 3A.1

The fair, clear and not misleading rules

MCOB 3A.2 , except MCOB 3A.2.5 R

Other general requirements for financial promotions

MCOB 3A.3

Qualifying credit financial promotions

MCOB 3A.4

MCD financial promotions (note 1)

MCOB 3A.5

Systems and controls

MCOB 3A.9

Note 1: This item does not apply to non-MCDfinancial promotions of qualifying credit.

Application for a financial promotion of a home reversion plan

MCOB 3A.1.5 R

This chapter applies to the communication or approval of a financial promotion of a home reversion plan as follows:

Application and purpose

MCOB 3A.1

The fair, clear and not misleading rules

MCOB 3A.2 , except MCOB 3A.2.5 R

Other general requirements for financial promotions

MCOB 3A.3

Home reversion plan financial promotions

MCOB 3A.7

Systems and controls

MCOB 3A.9

Application for a financial promotion of a regulated sale and rent back agreement

MCOB 3A.1.6 R

This chapter applies to the communication or approval of a financial promotion of a regulated sale and rent back agreement as follows:

Application and purpose

MCOB 3A.1

The fair, clear and not misleading rules

MCOB 3A.2 , except MCOB 3A.2.5 R

Other general requirements for financial promotions

MCOB 3A.3

Sale and rent back financial promotions

MCOB 3A.8

Systems and controls

MCOB 3A.9

Application for a financial promotion of a home purchase plan

MCOB 3A.1.7 R

This chapter applies to the communication or approval of a financial promotion of a home purchase plan as follows:

Application and purpose

MCOB 3A.1

Fair, clear and not misleading rule for approval of home purchase plan financial promotions

MCOB 3A.2.5 R

Home purchase plan financial promotions

MCOB 3A.6

Exemptions

MCOB 3A.1.8 R

Except for MCOB 3A.2.4R (2) and MCOB 3A.5, this chapter does not apply to a firm in relation to a financial promotion of qualifying credit that is of a kind listed in MCOB 3A.1.9 R, except if the firm approves the financial promotion, then the following apply:

  1. (1)

    MCOB 3A.1 (Application and purpose);

  2. (2)

    MCOB 3A.2.4 R (Fair, clear and not misleading financial promotions);

  3. (3)

    MCOB 3A.4.4 G to MCOB 3A.4.7 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); and

  4. (4)

    if the firm approves a non-real time financial promotion of qualifying credit by an overseas personMCOB 3A.4.8 R (Non-real time qualifying credit promotions for overseas persons) applies.

MCOB 3A.1.9 R

This table belongs to MCOB 3A.1.8 R.

Exemptions

This chapter does not apply to the following:

(1)

a financial promotion which contains only one or more of the following

(a)

the name of the firm (or its appointed representative);

(b)

a logo;

(c)

a contact point (address (including an email address), telephone or facsimile number);

(d)

a brief, factual statement of the firm's (or its appointed representative's) main occupation;

(2)

a financial promotion which can lawfully be communicated by an unauthorised person without approval;

(3)

a financial promotion communicated from outside the United Kingdom which would be exempt under articles 30, 31, 32 or 33 of the Financial Promotion Order (Overseas communicators) if the office from which the financial promotion is communicated were a separate unauthorised person (but see GEN 4.4.1 R (Business for private customers from non-UK offices)).

Combination of exemptions

MCOB 3A.1.10 R

A firm may rely on more than one exemption in relation to the same financial promotion.

Other relevant handbook rules

MCOB 3A.1.11 G

Firms are reminded that financial promotions (including those which are exempt) may be subject to more general rules, including Principle 7 (Communications with clients), SYSC 3 to SYSC 10 (Systems and controls), and MCOB 3A.2.4 R (Fair, clear and not misleading communications).

Territorial scope

MCOB 3A.1.12 G

The territorial scope for rules relating to communicating information to a customer is set out in MCOB 1.3.1 R.

MCOB 3A.1.13 R

This chapter applies to a firm in relation to:

  1. (1)

    the communication of a financial promotion to a person in the United Kingdom;

  2. (2)

    the communication of a cold call of qualifying credit, a home reversion plan or a regulated sale and rent back agreement, unless it is made from a place, and for the purposes of a business which is only carried on, outside the United Kingdom;

  3. (3)

    the approval of a non-real time financial promotion of qualifying credit, a home reversion plan or a regulated sale and rent back agreement for communication to a person in the United Kingdom;

  4. (4)

    the communication or approval for communication of a financial promotion that is an electronic commerce communication to a person in an EEA State other than in the United Kingdom; and

  5. (5)

    the communication or approval for communication of a financial promotion in relation to an MCD regulated mortgage contract to a person in an EEA State other than in the United Kingdom.

MCOB 3A.1.14 G

The application under MCOB 3A.1.13 R is relevant both when a firmcommunicates a financial promotion itself and when a firmapproves a non-real time financial promotion for communication by others. However, see also MCOB 3A.1.15 R (Exceptions to territorial scope: rules without territorial limitation for approval of financial promotions).

Exceptions to territorial scope: rules without territorial limitation for approval of financial promotions

MCOB 3A.1.15 R

Subject to MCOB 3A.1.16 R, the following parts of this chapter apply without any territorial limitation if a firmapproves a financial promotion of qualifying credit, a home reversion plan or a regulated sale and rent back agreement:

  1. (1)

    MCOB 3A.1 (Application and purpose);

  2. (2)

    rules requiring a financial promotion to be fair, clear and not misleading (see MCOB 3A.2.4 R); and

  3. (3)

    provisions regarding the approval of financial promotions (except those relating to approval of financial promotions of qualifying credit provided by an overseas person) (see MCOB 3A.4.4 G to MCOB 3A.4.7 G, MCOB 3A.7.1 R and MCOB 3A.8.5 R).

Exceptions to territorial scope: financial promotions of qualifying credit relating to distance contracts

MCOB 3A.1.16 R
  1. (1)

    Notwithstanding MCOB 3A.1.13 R and MCOB 3A.1.15 R, where a firm which satisfies the conditions in (2) communicates a financial promotion of qualifying credit, the rules in (3) do not apply.

  2. (2)

    The conditions are that:

    1. (a)

      the firmcommunicates the financial promotion of qualifying credit 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 Distance Marketing Directive; or

      2. (ii)

        has obligations in its domestic law corresponding to those provided for by the Distance Marketing Directive;

    3. (c)

      the financial promotion of qualifying credit relates, exclusively, to a distance contract, for the conclusion of which the obligations provided for by the Distance Marketing Directive (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 54 of the Treaty.

  3. (3)

    The rules which do not apply are:

    1. (a)

      MCOB 3A.3.2 R (Name and contact point); and

    2. (b)

      MCOB 3A.4.1R (1) and (2) (Real time qualifying credit promotions).

Principles 6 and 7

MCOB 3A.1.17 G

This chapter amplifies, for activities within its scope, Principle 6 (Customers' interests) and Principle 7 (Communications with clients).