Related provisions for MCOB 4.1.5
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The purpose of this chapter is to establish the requirements for the proper calculation of the APR. As a cost measure which facilitates comparisons between similar mortgages offered on a similar basis, the APR is an integral element of the rules relating to qualifying credit promotions and disclosure.
(1) If, in any communication:(a) made to a private customer or, in the case of a communication relating to non-investment insurance contracts, a retail customer,1(b) in connection with a regulated activity carried on from an establishment of the firm (or its appointed representative) that is not in the United Kingdom;the firm indicates that it is an authorised person, it must also, where relevant, and with equal prominence, give the information in (2) in writing.(2) The information
A firm may have entered into a mix of regulated mortgage contracts and non-regulated mortgage contracts with a customer secured on the same property. In such circumstances, if the regulated mortgage contract is in arrears, notwithstanding that the overall position in respect of the mortgages generally is not in arrears, the firm will need to comply with all the requirements of MCOB 13 in respect to the regulated mortgage contract. Where this involves providing the customer with
In relation to a regulated mortgage contract for a business purpose, if a firm has opted for the tailored route inMCOB 1.2.3 R(2), it must adopt the following modifications to the provisions in MCOB:(1) (except in relation to sections 6 and 8 of any initial disclosure document provided in accordance with MCOB 4.4.1 R(1)(c)(i) or sections 5 and 8 of any initial disclosure document provided in accordance with MCOB 4.4.1 R(1)(c)(ii)) substitute an alternative description of the facility
(1) Firms are reminded of the requirement in MCOB 2.2.6 R that any communication should be clear, fair and not misleading when substituting an alternative for the term 'mortgage' in accordance with MCOB 1.2.7 R(1).(2) Possible alternatives to the term 'mortgage' include, for example, 'secured business overdraft', 'secured loan' or 'secured business credit'.
The illustration provided as part of the offer document in accordance with MCOB 6.4.1 R (1) must meet the requirements of MCOB 5.6 (Content of illustrations) with the following modifications:(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, the interest rate, charges, the exchange rate or the APR required by MCOB 10 (Annual Percentage Rate), at the date the
In adapting and revising the illustration that is part of the offer document in accordance with MCOB 6.4.4 R(1) a firm must:(1) avoid amending the format of the information required by MCOB 5.6 (Content of illustrations) where possible, since this could result in the illustration in the offer document being difficult to compare with the illustration originally provided to the customer in accordance with MCOB 5.5.1 R;(2) use, where possible, the same headings, ordering of information,
(1) Regulations 3(1) to (3B) of the Appointed Representatives Regulations makes it a requirement that the contract between the firm and the appointed representative (unless it prohibits the appointed representative from representing other counterparties) contains a provision enabling the firm to:4(a) impose such a prohibition; or(b) impose restrictions as to the other counterparties which the appointed representative may represent, or as to the types of investment in relation
4(1) The effect of SUP 12.5.6A R (1)(a) is that, in relation to designated investment business with private customers, appointed representatives are restricted to one principal.4(2) The effect of SUP 12.5.6A R (1)(b) and SUP 12.5.6A R (1)(c) is that, in relation to regulated mortgage activities with customer, appointed representatives are restricted to having two principals: one for regulated mortgage contracts and one for lifetime mortgages4
1In this section, and Forms 1R(2) to (4) in SUP 16 Annex 6R:(1) '12 month report' means the part of a persistency report or data report reporting on life policies or stakeholder pensions effected in Y-2, '24 month report' means the part of a persistency report or data report reporting on life policies or stakeholder pensions effected in Y-3, and so on;(2) 'CC' means the number of life policies or stakeholder pensions which: (a) were effected during the period to which the calculation
1The firm must, if a persistency report reports on;(1) an endowment assurance with a term of five years or less:(a) report on such a policy in Form 1R(2); and(b) not report on such a policy in Form 1R(1);(2) a group personal pension policy, include the policy as a personal pension policy in Forms 1R(1) and 1R(3);(3) a mortgage endowment, also include the policy as an endowment assurance in Forms 1R(1) and 1R(3);(4) an income withdrawal, not include the policy under any other relevant
Article 61(3)(a) of the Regulated Activities Order defines a regulated mortgage contract as a contract which, at the time it is entered into, satisfies the following conditions:(1) the contract is one where a lender provides credit to an individual or trustees (the 'borrower');(2) the contract provides for the obligation of the borrower to repay to be secured by a first legal mortgage on land (other than timeshare accommodation) in the United Kingdom; and(3) at least 40% of that
There are other pre-contract information requirements outside this chapter, including:(1) for financial promotions, inCOB 3 (Financial promotion)(2) for designated investment business, inCOB 4.2 (Terms of business and client agreements with customers), COB 4.3 (Disclosing information about services, fees and commission - packaged products), COB 5.5 (Information about the firm), COB 6.1 to COB 6.5 (Product disclosure) and CASS (Client assets);(3) for non-investment insurance contracts3,
Some typical examples where the business test is unlikely to be satisfied are:(1) when an individual enters into or administers a one-off mortgage securing a loan to a friend or member of his family whether at market interest rates or not; or(2) when a person provides a service without any expectation of reward or payment of any kind, such as advice given or arrangements made by many Citizens Advice Bureaux and other voluntary sector agencies (but see PERG 4.3.8G (3) where payment
The following limits apply in respect of immovables held as part of the scheme property:(1) the amount secured by mortgages over any immovable must not exceed 100% of the latest valuation by an appropriate valuer under COLL 8.4.11 R (2)(c) or COLL 8.4.11 R (2)(d) or COLL 8.4.13 R, as appropriate;(2) no option may be granted to a person to buy or obtain an interest in any immovable comprised in the scheme property if this might unduly prejudice the ability to provide redemption;
Some loans that will fall within the regulated mortgage contract definition are also currently classified as regulated agreements under the CCA. In these cases, the impact of the carve-out in article 90 of the Regulated Activities Order is likely to be more significant. In particular, most of the CCA controls in respect of entering into, operation and termination of agreements will not apply. Article 90 also, however, provides that section 126 of the CCA (Enforcement of land mortgages)
(1) The value of the scheme property is the net value of the scheme property after deducting any outstanding borrowings (including any capital outstanding on a mortgage of an immovable).(2) Any part of the scheme property which is not an investment (save an immovable) must be valued at fair value.(3) For the purposes of (2), any charges that were paid, or would be payable, on acquiring or disposing of the asset must be excluded from the value of that asset.(4) The value of the
(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 a mortgage lender where the regulated mortgage contract is a regulated lifetime mortgage contract.(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) The table in MCOB 9.5.3 R replaces certain rules and guidance in