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  2. Point in time
    2009-02-10

MCOB 3.11 Communication and approval of qualifying credit promotions for an overseas person or an unauthorised person

Approval of qualifying credit promotions

MCOB 3.11.1G
  1. (1)

    Section 21(1) of the Act (Restrictions on financial promotion) prohibits an unauthorised person from communicating a financial promotion, in the course of business, unless an exemption applies or the financial promotion1 is approved by a firm.

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  2. (2)

    Most of the rules in this chapter apply when a firm approves a financial promotion of qualifying credit1 in the same way as when a firm communicates a financial promotion of qualifying credit1 itself. A firm therefore has a similar responsibility for a financial promotion of qualifying credit1 that it approves as for one that it communicates. For example, a firm which approves a non-real time financial promotion1 must:

    1111
    1. (a)

      confirm that the financial promotion1 complies with the rules in this chapter; and

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    2. (b)

      be able to show that it has taken reasonable steps to ensure that the financial promotion1 is clear, fair and not misleading.

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  3. (3)

    A firm may also wish to approve a financial promotion of qualifying credit1 that it communicates itself. This would ensure that an unauthorised person who then also communicates it1 to another person will not contravene the restriction in section 21(1) of the Act (Restrictions on financial promotion).

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  4. (4)

    A firm which approves a promotion that is exempt under MCOB 3.2.5 R (Application: what?; exemptions) or MCOB 3.3.1 R (Application: where?) must still comply with certain rules in this chapter (see MCOB 3.2.4 R (Application: what? exemptions) and MCOB 3.3.3 R (Exceptions to territorial scope: rules without territorial limitation)).

No approval of real time qualifying credit promotions

MCOB 3.11.2R

A firm must not approve a real time financial promotion of qualifying credit1.

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Approval of qualifying credit promotions when not all the rules apply

MCOB 3.11.3R

If a firm approves a financial promotion of qualifying credit1 in circumstances in which one or more of the rules in this chapter are expressly disapplied, the approval must be given on terms that it is limited to those circumstances.

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MCOB 3.11.4G

If an approval is limited in accordance with MCOB 3.11.3 R, and an unauthorised personcommunicates the financial promotion1 to persons not covered by the approval, the unauthorised person may commit an offence under section 21(1) of the Act (Restrictions on financial promotion). A firm giving a limited approval may wish to advise the unauthorised person accordingly.

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Non-real time qualifying credit promotions for overseas persons

MCOB 3.11.5R

A firm must not communicate or approve a non-real time financial promotion1 which relates to qualifying credit provided by an overseas person, unless:

1
  1. (1)

    the qualifying credit promotion makes clear which firm has approved or communicated it and, where relevant, explains;

    1. (a)

      that the rules made under the Act for the protection of customers do not apply;

    2. (b)

      the extent and level to which the compensation scheme will be available, or if the scheme will not be available, a statement to that effect; and

    3. (c)

      if the communicator wishes, the protection or compensation available under another system of regulation; and

  2. (2)

    the firm has no reason to doubt that the overseas person will deal with customers in the United Kingdom in an honest and reliable way.