MCOB 1 Annex 1 Summary of firm types and of the regulated mortgage activities

This annex belongs to MCOB 1.2.2 G and summarises the four firm types which are used in MCOB, the regulated mortgage activities which they carry on, what those activities cover and what is excluded. (See AUTH App 4 for detailed guidance on regulated mortgage activities). References to articles are to articles of the Regulated Activities Order.

The exclusions listed in this table are only a summary of the exclusions in the Regulated Activities Order. This summary is not a complete explanation of the exclusions and should not be relied on as if it were.

mortgage lender

entering into a regulated mortgage contract as lender (article 61(1) (Regulated mortgage contracts))

the provision of credit (which includes a cash loan or any other form of financial accommodation) to an individual or trustee under a regulated mortgage contract

unless:(1) the person providing credit is acting in the capacity of trustee or personal representative (article 66). See AUTH App 4.10.5G - 4.10.8G; or

(2) both the lender and borrower are overseas (AUTH App 4.11 (Link between activities and the United Kingdom)).

mortgage administrator

administering a regulated mortgage contract where that contract is entered into on or after 31 October 2004 (article 61(2) (Regulated mortgage contracts))1

(1) notifying the borrower of changes in interest rates or payments due under the contract, or of other matters of which the contract requires him to be notified; or

(2) taking any necessary steps for the purposes of collecting or receiving payments due under the contract from the borrower.

unless:(1) the person arranges for a mortgage administrator to administer the contract (article 62); or

(2) the person administers the contract for a period of not more than one month after the arrangement in (1) has come to an end (article 62); or

(3) the person administers the contract under an agreement with a mortgage administrator (article 63); or

(4) the person administering the contract is acting in the capacity of trustee or personal representative (article 66). See AUTH App 4.10.5 G - AUTH App 4.10.8 G; or

(5) both the administrator and borrower are overseas (AUTH App 4.11 (Link between activities and the United Kingdom)).

mortgage adviser

advising on regulated mortgage contracts (article 53A (Advising on regulated mortgage contracts))

giving advice to a person in his capacity as borrower or potential borrower on the merits of doing any of the following:

(1) entering into a particular regulated mortgage contract; or

(2) varying the terms of a regulated mortgage contract entered into on or after 31 October 2004 in such a way as to vary the borrower's obligations under the contract (see AUTH App 4.6 (Advising on regulated mortgage contracts)).1

unless:

(1) the advice is given in a periodical publication, regularly updated news and information service or broadcast (article 54); see AUTH 7 (Periodical publications, news services and broadcasts: applications for certification); or

(2) the advice is given in the course of administration of the contract by an authorised person (article 54A); or

(3) the advice is given by a person carrying on a profession or business (other than a regulated activity) (article 67). See AUTH App 4.10 (Exclusions applying to more than one regulated activity); or

(4) the person giving the advice is acting in the capacity of trustee or personal representative (article 66). See AUTH App 4.10.5G - 4.10.8G.

mortgage arranger

(1) making arrangements for another person to

(a) enter into a regulated mortgage contract as borrower; or

(b) vary the terms of a regulated mortgage contract entered into by him as borrower after 31 October 2004 in such a way as to vary his obligations under the contract (article 25A(1)).

(1) making arrangements which bring about, or would bring about:

(a) the entering into of a regulated mortgage contract; or

(b) the variation of the terms of a regulated mortgage contract entered into after 31 October 2004, for example brokers making arrangements on behalf of a borrower which go beyond merely introducing. See AUTH App 4.5.2G.

unless:

(1) the person making the arrangements is to be a party to the regulated mortgage contract (article 28A) (but a mortgage lender is treated as a mortgage arranger for the purposes of MCOB: see MCOB 1.2.12R); or

(2) the arrangements do not bring about or would not bring about the regulated mortgage contract in question (article 26); or

(3) the arrangements are made between a borrower and an authorised person by an unauthorised person if specified conditions as to advice and remuneration are satisfied (article 29) (see AUTH App 4.5.8G); or

(4) the arrangements are made in the course of administration by an authorised person (article 29A); or

(5) the arrangements are made by a person in the course of carrying on a profession or business (other than a regulated activity) (see AUTH App 4.10) (Exclusions applying to more than one regulated activity); or

(6) where the arranger and borrower are overseas (AUTH App 4.11 (Link between activities and the United Kingdom)).

(2) making arrangements with a view to a person who participates in the arrangements entering into a regulated mortgage contract as borrower (article 25A(2)).

(2) making arrangements with a view to a person participating in those arrangements entering into a regulated mortgage contract (for example introducing potential borrowers to brokers or lenders). See AUTH App 4.5.3G.

(2) - (6) also apply and, in addition:

(1) arrangements under which a borrower is introduced to a mortgage arranger, a mortgage adviser or mortgage lender (which will include overseas firms) or an appointed representative who is appointed to arrange or advise on a regulated mortgage contract (article 33A). (See AUTH App 4.5.10G - 4.5.18G); or

(2) where the arrangements simply enable the parties to communicate with one another (for example internet service providers or telecommunication networks) (article 27).