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MCOB 3.2 Application: what?

What do "communicate", "approve" and "financial promotion" mean?

MCOB 3.2.1 G
  1. (1)

    The rules in this chapter adopt various concepts from the restriction on financial promotion by unauthorised persons in section 21(1) of the Act (Restrictions on financial promotion). Guidance on that restriction is contained in AUTH App 1 (Financial promotion and related activities) and that guidance will be relevant to interpreting these rules. In particular, guidance on the meaning of:

    1. (a)

      'communicate' is in AUTH App 1.6 (Communicate); and

    2. (b)

      'invitation or inducement' and 'engage in investment activity' (two elements which, with 'communicate', make up the definition of 'financial promotion') is in AUTH App 1.4 (Invitation or inducement) and AUTH App 1.7 (Engage in investment activity).

  2. (2)

    Guidance on the approval of a qualifying credit promotion is in MCOB 3.11.1 G (Approval of qualifying credit promotions).

Media of communication

MCOB 3.2.2 G
  1. (1)

    There is no restriction on the media of communication to which this chapter applies. It applies to a qualifying credit promotioncommunicated by any means, including by way of printed advertising, radio and television broadcasts, a personal visit, a telephone call, an e-mail, the Internet and electronic media such as digital and other forms of interactive television or media. Both solicited and unsolicited communications are covered.

  2. (2)

    Qualifying credit promotions may be communicated for example, by means of:

    1. (a)

      product brochures;

    2. (b)

      general advertising in magazines, newspapers, radio and television programmes and websites;

    3. (c)

      mailshots (whether distributed by post, facsimile, e-mail or other media);

    4. (d)

      telemarketing activities, such as telephone calls made by call centres;

    5. (e)

      written correspondence, telephone calls and face-to-face discussions with customers;

    6. (f)

      sales aids which themselves constitute a qualifying credit promotion;

    7. (g)

      presentations to groups of customers; and

    8. (h)

      other publications, which may contain non-personal recommendations as to obtaining qualifying credit.

MCOB 3.2.3 G

Guidance on the use of the Internet for communicatingqualifying credit promotions is in AUTH App 1.22 (The Internet)

Exemptions

MCOB 3.2.4 R

This chapter does not apply to a firm in relation to a qualifying credit promotion of a kind listed in MCOB 3.2.5 R, except that if the firmapproves the qualifying credit promotion, the following apply:

  1. (1)

    MCOB 3.1 to MCOB 3.5 (Application, Purpose and General);

  2. (2)

    MCOB 3.6.3 R (Non-real time qualifying credit promotions: clear,

    fair and not misleading);

  3. (3)

    MCOB 3.11.1 G to MCOB 3.11.4 G (Approval of qualifying credit promotions; No approval of real time qualifying credit promotions; Approval of qualifying credit promotions when not all the rules apply); and

  4. (4)

    if the firmapproves a non-real time qualifying credit promotionrelating to qualifying credit by an overseas personMCOB 3.11.5 R (Non-real time qualifying credit promotions for overseas persons) applies.

MCOB 3.2.5 R

This table belongs to MCOB 3.2.4 R.

Exemptions

This chapter does not apply to the following:

(1)

an illustration produced in accordance with the requirements of MCOB 5, MCOB 6, MCOB 7 or MCOB 9;

(2)

a qualifying credit promotion which contains only one or more of the following:

(a)

the name of the firm (or its appointed representative);

(b)

a logo;

(c)

a contact point (address (including an e-mail address), telephone or facsimile number);

(d)

a brief, factual statement of the firm's (or its appointed representative's) main occupation;

(3)

a qualifying credit promotion which can lawfully be communicated by an unauthorised person without approval;

(4)

a qualifying credit promotioncommunicated from outside the United Kingdom which would be exempt under articles 30, 31, 32 or 33 of the Financial Promotion Order (Overseas communicators) if the office from which the qualifying credit promotion is communicated were a separate unauthorised person (but see GEN 4.4.1R (Business for private customers from non-UK offices));
MCOB 3.2.6 G

MCOB 3.2.5 R (2) exempts a qualifying credit promotion made by a firm or an appointed representative which refers to its activities only in general terms in image or brand advertising. The items identified in MCOB 3.2.5 R(2) do not enable detailed information to be given about the qualifying credit available from the firm. Thus firms should avoid the use of names, logos or addresses, for example, which attempt to convey additional mortgage or cost-related information.

Combination of exemptions

MCOB 3.2.7 R

A firm may rely on more than one exemption (and also on MCOB 3.3.1 R (Application: where?)) in relation to the same qualifying credit promotion.

Other handbook rules relevant to qualifying credit promotions

MCOB 3.2.8 G

Firms are reminded that qualifying credit promotions (including those which are exempt) may be subject to more general rules, including Principle 7 (Communications with clients), SYSC 3 (Systems and controls) and MCOB 2.2.6 R (Clear, fair and not misleading communication).

MCOB 3.2.9 G

Firms are reminded that if in the course of making a qualifying credit promotion of any kind an adviser gives specific advice on regulated mortgage contracts to a customer about the suitability of a product for that individual, the adviser in giving the advice is subject to the rules, as appropriate, on advising and selling in MCOB 4 (Advising and selling standards) and MCOB 8 (Lifetime mortgages: advising and selling standards).