MCOB 9.5 Disclosure at the offer stage for 3equity release transactions3

MCOB 9.5.1R
  1. (1)

    MCOB 6.1 to MCOB 6.6 (with the modifications stated in MCOB 9.5.2 R to MCOB 9.5.4 R) apply to an equity release provider where the home finance transaction is an equity release transaction, except that those provisions that by their nature are only relevant to regulated mortgage contracts do not apply to home reversion plans (see MCOB 9.1.2A G).

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  2. (2)

    The table in MCOB 9.5.2 R shows how the relevant rules and guidance in MCOB 6 must be modified by replacing the cross-references with the relevant cross-references to rules and guidance in MCOB 9.4, and MCOB 9.5.

  3. (3)

    The table in MCOB 9.5.3 R replaces certain rules and guidance in MCOB 6 with rules and guidance from MCOB 9.5.

  4. (4)

    The terms and expressions in the rules and guidance in MCOB 6 that by their nature are only connected to regulated mortgage contracts must be replaced with the appropriate equivalent terms and expressions for home reversion plans (see MCOB 9.3.1A G).3

MCOB 9.5.2R

Table of modified cross-references to other rules:

This table belongs to MCOB 9.5.1 R.

Subject

Rule or guidance

Reference in rule or guidance

To be read as a reference to:

Application: What?

MCOB 6.1.5R

MCOB 6

MCOB 6 as modified by MCOB 9.5

Content of offer document

MCOB 6.1.6G

MCOB 5.6

MCOB 9.4

Purpose

MCOB 6.2.1G

MCOB 6

MCOB 6 as modified by MCOB 9.5

General

MCOB 6.3.2R

Records

MCOB 6.4.3R

Modifications to the illustration

MCOB 6.4.5G

MCOB 6.4.4R(5)(b)

MCOB 9.5.4R(6)(b)

Modifications to the illustration

MCOB 6.4.6R

MCOB 6.4.4(1)

MCOB 9.5.4R(1)

Modifications to the illustration

MCOB 6.4.6R(1) and (2)

MCOB 5.6

MCOB 9.4

Modifications to the illustration

MCOB 6.4.7R

MCOB 6.4.4R(1)

MCOB 9.5.4R(1)

Modifications to the illustration

MCOB 6.4.7R(2)

MCOB 5

MCOB 9

Modifications to the illustration

MCOB 6.4.7R(3)

MCOB 5.6.73R to MCOB 5.6.83G

MCOB 9.4.72R to MCOB 9.4.82G

Modifications to the illustration

MCOB 6.4.7R(3)

MCOB 5.6.92R to MCOB 5.6.112G

MCOB 9.4.91R to MCOB 9.4.110R

Other information contained in the offer document

MCOB 6.4.13R

MCOB 5.6.122R

MCOB 9.4.126R

Offer documents in place of illustrations

MCOB 6.6.1R

MCOB 5.4 and MCOB 5.5

MCOB 5.4 and MCOB 5.5 as modified by MCOB 9

MCOB 9.5.3R

Table of rules in MCOB 6 replaced by rules in MCOB 9:

This table belongs to MCOB 9.5.1 R

Subject

Rule

Rule replaced by

Modifications to the illustration

MCOB 6.4.4R

MCOB 9.5.4R

MCOB 9.5.4R

The illustration provided as part of the offer document in accordance with MCOB 6.4.1 R(1) must meet the requirements of MCOB 9.4, with the following modifications:

  1. (1)

    the illustration must be suitably adapted and revised to reflect the fact that the firm is making an offer to a customer and updated to reflect changes to, for example, for a lifetime mortgage3 the interest rate, charges, the exchange rate or the APR required by MCOB 10 (Annual Percentage Rate) at the date the illustration is issued;

  2. (2)

    the illustration must be based on the example term estimated in accordance with MCOB 9.4.10 R;

  3. (3)

    MCOB 9.4.2 R(2)(a) does not apply;

  4. (4)

    MCOB 9.4.17 R (Information to be included at the head of the illustration) does not apply;

  5. (5)

    Section 1: 'About this information'3 is replaced by the following: "Section 1: 'About this offer document'. Under the section heading 'About this offer document', the following text must be included:

    3
    1. (a)

      "You are not bound by the terms of this offer document until [insert relevant circumstances, including the names of any documents that must be signed. For example "you have signed the legal charge and the funds are released for your lifetime mortgage"] or "you have signed the agreement to sell your property to the reversion provider"]3. We are required by the Financial Conduct Authority (FCA) - the independent watchdog that regulates financial services - to provide you with this offer document."

    2. (b)

      (unless the offer document is being provided in place of an illustration3)"You should compare this offer document with the key facts illustration given to you before you applied for this [lifetime mortgage] [home reversion plan]3, to see how the details may have changed."

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  6. (6)

    either:3

    3
    1. (a)

      The heading for Section 2 is replaced with 'Which service did we provide you with?' and3 the following text should be presented as two options each with a 'check box', one of which must be marked prominently to indicate the level of service provided to the customer: "We have recommended, having assessed your needs, that you take out this [lifetime mortgage] [home reversion plan]." "We have not recommended a particular [lifetime mortgage] [home reversion plan] for you. You must make your own choice whether to accept this [lifetime mortgage] [home reversion] offer."; or3

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    2. (b)

      if the service described in Section 2 of the earlier illustration was provided by another firm, the heading for Section 2 is replaced by 'Which service were you provided with?' and the following text should be presented as two options each with a 'check box' one of which must be marked prominently to indicate the level of service provided to the customer: "[name of firm] recommended that you take out this [lifetime mortgage] [home reversion plan]." "[name of firm] did not recommend a particular [lifetime mortgage] [home reversion plan], for you. You must make your own choice whether to accept this [mortgage] [home reversion] offer.";3

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  7. (7)

    the fees recorded in the illustration that is part of the offer document must include any fees paid or payable by the customer;1

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  8. (8)

    any requirements to disclose whether a fee is refundable must be read as including fees that have already been paid;3

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  9. (9)

    [deleted]2

    2
  10. (10)

    for a lifetime mortgage:3

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    1. (a)

      where additional features are included in accordance with MCOB 9.4.91 R and these are credit facilities that meet the definition of a regulated credit agreement4 regulated by the Consumer Credit Act 1974 and the Act4, the relevant parts of Section 14 of the illustration that is part of the offer document must include the following text: "This credit facility is regulated under the Consumer Credit Act 1974 and the Financial Services and Markets Act 20004. Please refer to the separate credit agreement which describes the facility and the terms on which the credit is available.";3

    2. (b)

      The text required by MCOB 9.4.102 R (2)(a) or MCOB 9.4.102 R (2)(b) should be adapted to include, or tell the customer where they can find, the information required by MCOB 6.5.4 R; and3

    3. (c)

      MCOB 9.4.119 R and MCOB 9.4.120 R apply to the illustration that is part of the offer document if the illustration given out in accordance with MCOB 9 was issued by, or on behalf of, a mortgage intermediary.3

MCOB 9.5.5R

3For home reversion plans, the firm must provide the customer with copies of the valuation report for the property and the terms of the home reversion plan including the terms on which he will occupy the property, together with the offer document.