MCOB 3.1 Application: who?
This chapter applies to every firm which communicates or approves a qualifying credit promotionfinancial promotion of qualifying credit or of a home reversion plan.
This chapter applies generally to firms in relation to all qualifying credit promotions. This wide application is however cut back by MCOB 3.2 (Application: what?) and MCOB 3.3 (Application: where?) which limit the application of this chapter for:
-
(1)
qualifying credit promotions which would fall within the scope of the exemptions in the Financial Promotion Order or the additional exemptions set out in MCOB 3.2.5 R (Applications: what? Exemptions); and
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(2)
qualifying credit promotions to persons outside the United Kingdom.
MCOB 3.1.1 R means that:
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(1)
this chapter applies not only to financial promotions for regulated mortgage contracts, but also to promotions for qualifying credit; and
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(2)
this chapter applies to all aspects of a promotion by a firm of products which combine unsecured and secured lending.
In relation to MCOB 3.1.3 G(2), an example would be a promotion for a mortgage product, one feature of which was an unsecured lending facility or reserve.
Under section 39(3) of the Act, a firm is responsible for financial promotionscommunicated by its appointed representatives when acting as such.
This chapter does not apply to a firm in relation to the communication or approval of a financial promotion that is not a qualifying credit promotion (but see COB 3 (Financial promotion)).
A communication may contain both a financial promotion and a qualifying credit promotion, for example a building society leaflet which describes the range of mortgage and savings products it provides. In such cases, both MCOB 3 and COB 3 will be relevant.
As a result of articles 90 and 91 of the Regulated Activities Order:
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(1)
a qualifying credit promotion is not subject to the advertising provisions of the Consumer Credit Act 1974, unless it is an exempt generic promotion; and
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(2)
where a firm makes a communication, which consists of a qualifying credit promotion and information relating toa different form of lending that is not qualifying credit (for example an unsecured personal loan), the content of the latter will need to comply with the relevant advertising provisions of the Consumer Credit Act 1974.
Authorised professional firms
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(1)
Except for MCOB 3.6.17 R to MCOB 3.6.25 R (Annual percentage rate (APR)), MCOB 3 does not apply to an authorised professional firm in relation to the communication of a qualifying credit promotion if the following conditions are satisfied:
- (a)
the firm's main business must be the practice of its profession (see IPRU(INV) 2.1.2R(3));
- (b)
the qualifying credit promotion must be made for the purposes of and incidental to the promotion or provision by the firm of:
- (i)
its professional services; or
- (ii)
its non-mainstream regulated activities (see PROF 5.2 (Nature of non-mainstream activities)); and
- (i)
- (c)
the qualifying credit promotion must not be communicated on behalf of another person who would not be able lawfully to communicate the qualifying credit promotion if he were acting in the course of business.
- (a)
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(2)
In (1)(b)(i), 'professional services' means services:
- (a)
which do not constitute a regulated activity; and
- (b)
the provision of which is supervised and regulated by a designated professional body.
- (a)
Authorised professional firms are reminded that in circumstances in which MCOB 3 does not apply to the firmMCOB 2.2.6 R (Clear fair and not misleading communication) may apply.
Nationals of other EEA States
A national of an EEA State (other than the United Kingdom) wishing to take advantage of the exemption in article 36 of the Financial Promotion Order in respect of a qualifying credit promotion should act in conformity with the rules in this chapter.
Illustrative examples of qualifying credit promotions
MCOB 3 Annex 1 gives examples of qualifying credit promotions that would satisfy some of the provisions of MCOB 3.