MCOB 1 Annex 4 Summary of the application of the Handbook to firms carrying on regulated mortgage activities and firms that communicate or approve qualifying credit promotions

High Level Standards

General provisions, GEN [*]

Applies (at least in part) to every mortgage administrator, mortgage adviser, mortgage arranger and mortgage lender; and also to every firm which communicates or approvesqualifying credit promotions.

Principles for Businesses, PRIN

Threshold Conditions, COND

Statements of Principle and Code of Practice for Approved Persons, APER

Applies to every approved person who performs a controlled function under an arrangement entered into by a mortgage administrator, mortgage adviser, mortgage arranger or mortgage lender; or by a firm which communicates or approves qualifying credit promotions.

The Fit and Proper test for Approved Persons, FIT

Applies to every firm including mortgage administrator, mortgage adviser, mortgage arranger and mortgage lender in respect of any application that it makes for the approval of a person to perform a controlled function.

Senior management arrangements, Systems and Controls, SYSC

Applies to every mortgage administrator, mortgage adviser, mortgage arranger and mortgage lender and also to firms which communicate or approvequalifying credit promotions.

Business Standards

Interim Prudential Sourcebooks,

IPRU (BANK)

• Applies to every mortgage administrator, mortgage adviser, mortgage arranger and mortgage lender where they are also banks;

IPRU (BSOC)

• Applies to every mortgage administrator, mortgage adviser, mortgage arranger and mortgage lender where they are also building societies;

IPRU (FSOC)

• Applies to every mortgage administrator, mortgage adviser, mortgage arranger and mortgage lender where they are also friendly societies;

IPRU (INS)

• Applies to every mortgage administrator, mortgage adviser, mortgage arranger and mortgage lender where they are also insurers;

IPRU (INV)

• Applies to every mortgage administrator, mortgage adviser, mortgage arranger and mortgage lender where they are also investment firms;

7GENPRU

• Applies to every mortgage administrator, mortgage adviser, mortgage arranger and mortgage lender where they are also insurers;

7INSPRU

• Applies to every mortgage administrator, mortgage adviser, mortgage arranger and mortgage lender where they are also insurers.

PRU 9.2 (Professional indemnity insurance requirements for insurance and mortgage mediation activities)

• Applies to every mortgage adviser and mortgage arranger.1

PRU 9.3 (Capital resources for insurance mediation activity, mortgage mediation activity, mortgage lending and mortgage administration)

• Applies to every mortgage adviser, mortgage administrator, mortgage arranger and mortgage lender.1

PRU 9.4 (Insurance undertakings and mortgage lenders using insurance or mortgage mediation services)1

• Applies to every mortgage lender which uses, or proposes to use, the services of another person consisting of insurance mediation, or insurance mediation activity or mortgage mediation activity.1

Market conduct, MAR

Does not apply to a mortgage administrator, mortgage adviser, mortgage arranger or mortgage lender when entering into or administering regulated mortgage contracts, or when communicating or approvingqualifying credit promotions. However, certain chapters of MAR apply to any such firm if:

(a) it also engages in behaviour in relation to qualifying investments traded on prescribed markets then MAR 1 applies;

(b) it undertakes or is concerned with offers of securities that may involve price stabilising activity then MAR 2 applies;

(c) it carries on inter-professional business - then MAR 3 applies;

(d) it carries on designated investment business - then MAR 4 applies.

Conduct of Business sourcebook, COB [*]

Does not apply to a firm when entering into or administering a regulated mortgage contract, or when communicating or approvingqualifying credit promotions. However, COB may apply to any such firm if it also carries on any other regulated activity and/or communicates or approvesfinancial promotions not relating to qualifying credit. The requirements of COB 3COB 3 (Financial Promotion) do not apply to qualifying credit promotions.

Insurance: Conduct of Business sourcebook, ICOB2

Does not apply to a firm when entering into or administering a regulated mortgage contract or when communicating or approving a qualifying credit promotion. However, ICOB may apply to any such firm if it also carries on an insurance mediation activity in relation to a non-investment insurance contract or communicates or approvesnon-investment financial promotions.2

Training and Competence sourcebook, TC [*]

TC 1 applies when a firmadvises on, arranges, enters into or administers regulated mortgage contract or when it communicates or approves qualifying credit promotions. TC 2 applies only in circumstances where a firm has employees engaging in or overseeing other activities as listed in TC 2.1.4 R.4

Regulatory processes

Client asset sourcebook, CASS

Does not apply to mortgage firms.

Authorisation manual, AUTH [*]

Applies to:

(1) a person, other than an authorised person, considering carrying on the regulated activities of mortgage administrator, mortgage adviser, mortgage arranger and mortgage lender in the United Kingdom, and who require guidance on whether authorisation is required and, if so, how to apply to the FSA for Part IV permission;

(2) an EEA firm or a Treaty firm that wishes to establish a branch or provide cross border services into the United Kingdom in relation to mortgage lending or wishes to apply for a top-up permission that includes mortgage lending;

(3) a person wishing to obtain approval for persons performing controlled functions in relation to mortgage lending and in conjunction with an application for Part IV permission; and

(4) a person wishing to understand how the FSA will use its powers in relation to authorisation to determine applications.

Supervision manual, SUP [*]

The following chapters of SUP apply to every mortgage administrator, mortgage adviser, mortgage arranger and mortgage lender, and also to firms which communicate or approvequalifying credit promotions: 1, 2, 3, 5, 6, 7, 8, 9, 10, 11, 15, 16, 20.

The following chapters of SUP do not apply to a mortgage administrator, mortgage adviser, mortgage arranger and mortgage lender; or to a firm which communicates or approvesqualifying credit promotions unless it carries on other activities: 4, 12, 13, 14, 17, 18, 19

Enforcement manual, ENF [*]

Potentially relevant for every mortgage administrator, mortgage adviser, mortgage arranger and mortgage lender and firms which communicate or approvequalifying credit promotions and gives guidance on the use of FSA's enforcement powers.

Decision making manual, DEC

Potentially relevant for every mortgage administrator, mortgage adviser, mortgage arranger and mortgage lender and firms which communicate or approvequalifying credit promotions and gives guidance on the use of FSA's enforcement powers.

Redress

Dispute Resolution: Complaints, DISP [*]

Applies to every mortgage administrator, mortgage adviser, mortgage arranger and mortgage lender; and also to firms which communicate or approvequalifying credit promotions.

Compensation, COMP [*]

The regulated mortgage activities which are covered by the compensation scheme are:

(1) advising on; or

(2) arranging regulated mortgage contracts; or

(3) agreeing to carry on the regulated activities in (1) to (2); or

(4) the activities of a mortgage lender which would be arranging but for article 28A of the Regulated Activities Order (Arranging contracts to which the arranger is a party).

Specialist sourcebooks

Credit unions, CRED

Applies to every mortgage administrator, mortgage lender, and to firms that communicate or approvequalifying credit promotions where they are credit unions and have a Part IV permission to accept deposits.

Electronic Commerce Directive, ECO [*]

Applies to a firm which carries on an electronic commerce activity.

Electronic money, ELM [*]

Applies to every firm that issues E-money.

Professional firms, PROF [*]

Applies to every mortgage administrator, mortgage adviser, mortgage arranger and mortgage lender and to firms that communicate or approvequalifying credit promotions where they are professional firms.

Lloyd's sourcebook. LLD

Applies only to the Society but some requirements are relevant to mortgage administrator, mortgage adviser, mortgage arranger and mortgage lender and to firms that communicate or approvequalifying credit promotions where they are also underwriting agents.

Collective Investment Scheme sourcebook, CIS

Applies to every mortgage administrator, mortgage adviser, mortgage arranger and mortgage lender and to firms that communicate or approvequalifying credit promotions where they are also an operator or a depositary of an ICVC or certain other Collective Investment Schemes.

Recognised Investment Exchanges and Recognised Clearing Houses, REC

Does not apply to mortgage administrator, mortgage adviser, mortgage arranger and mortgage lender, or to firms that communicate or approvequalifying credit promotions.

Listing, Prospectus and Disclosure3

Listing Rules, LR3

May apply if the firm is applying for listing in the United Kingdom, is a listedissuer in the United Kingdom, is a sponsor or is applying for approval as a sponsor.3

Prospectus Rules, PR3

May apply if the firm makes an offer of transferable securities to the public in the United Kingdom or is seeking the admission to trading of transferable securities on a regulated market situated or operating in the United Kingdom.3

Disclosure Rules and Transparency Rules, DTR3

May apply if the firm is an issuer, any class of whose financial instruments have been admitted to trading on a regulated market, or are the subject of an application for admission to trading on a regulated market, other than issuers who have not requested or approved admission of their financial instruments to trading on a regulated market.3

[Note: Handbook modules marked with an asterisk will be amended to take account of the introduction of mortgage regulation. The relevant amendments will take effect on 31 October 2004.]