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Status: You are viewing the version of the handbook as on 2009-03-31.

MCOB 8.3 Application of rules in MCOB 4

MCOB 8.3.1RRP
  1. (1) 3
    1. (a) 3

      Subject to (c),MCOB 4.1 to MCOB 4.6 and MCOB 4.8 (with the modifications stated in MCOB 8.3.3 R and MCOB 8.3.4 R) apply to a firm where the home finance transaction is a lifetime mortgage.3

      3
    2. (b)

      MCOB 4.1 to MCOB 4.4 and MCOB 4.8 (with the modifications stated in MCOB 8.3.3 R and MCOB 8.3.4 R) apply to a firm where the home finance transaction is a home reversion plan, except for those provisions that by their nature are only relevant to regulated mortgage contracts.3

  2. (2)

    The table in MCOB 8.3.3 R shows how the relevant rules and guidance in MCOB 4 must be modified by replacing the cross-references in that chapter with the relevant cross-references to rules and guidance in MCOB 8.

  3. (3)

    The table in MCOB 8.3.4 R replaces certain rules and guidance in MCOB 4 with rules and guidance from MCOB 8.

  4. (4) 3

    The terms that by their nature are relevant only to regulated mortgage contracts must be replaced with the appropriate equivalent terms and expressions for home reversion plans.

MCOB 8.3.1AGRP

3The rules and guidance that are not relevant to home reversion plans are those related, for example, to interest rates, APR, higher lending charge, mortgage credit cards, multi-part mortgages and foreign currency mortgages.

MCOB 8.3.1BGRP

3Firms should substitute equivalent home reversion terminology for lifetime mortgage terminology, where appropriate. Examples of terms and expressions that should be replaced in relation to home reversion plans are 'loan' or 'amount borrowed', which should be replaced with 'amount released' or 'amount to be released', as appropriate, and 'mortgage lender' and 'mortgage intermediary' which should be replaced with 'reversion provider' and 'reversion intermediary'.

MCOB 8.3.2R

In applying initial disclosure requirements to equity release transactions, the market for equity release transactions should be treated as one single market with two separate sectors. References3 to the 'whole market' must be read as references to the whole market for equity release transactions. This is unless the firm only gives personalised information or advice to customers on products in one market sector, in which case references to the 'whole market' must be read as references to the whole market for lifetime mortgages or home reversion plans as the case may be.

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MCOB 8.3.2AG

3 The effect of the rules on independence is that a firm that sells lifetime mortgages and home reversion plans from the whole market and enables the customer to pay a fee for the provision of the service, can hold itself out as being 'independent' for the equity release market (see MCOB 4.3.7 R). If the firm offers a service on this basis for only one of these market sectors, then it can only describe itself as 'independent' for that sector.

MCOB 8.3.3RRP

Table of modified cross-references to other rules: This table belongs to MCOB 8.3.1 R.

Subject

Rule or guidance

Reference in rule or guidance

To be read as a reference to:

Advice or information from the whole market

MCOB 4.3.4R(2)

MCOB 4.7.2R

MCOB 8.5.2R

Initial disclosure requirement (for equity release transactions only)3

3

MCOB 4.4.1R(1)(c) and (3)

MCOB 4 Ann 1R

MCOB 8 Ann 1R

Initial disclosure requirements

MCOB 4.4.3G

MCOB 4

MCOB 4 as modified by MCOB 8

Initial disclosure requirements where initial contact is by telephone (for equity release transactions only)3

3

MCOB 4.4.7R(2)1

MCOB 4 Ann 1R1

MCOB 8 Ann 1R1

Additional disclosure for distance mortgage mediation contracts

MCOB 4.5

MCOB 41

MCOB 4 as modified by MCOB 81

Non-advised sales

MCOB 4.8.6G

MCOB 4.7

MCOB 8.5

MCOB 8.3.4RRP

Table of rules in MCOB 4 replaced by rules in MCOB 8: This table belongs to MCOB 8.3.1 R.

Subject

Rule(s)

Rule(s) replaced by

Advised sales

MCOB 4.7

MCOB 8.5