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MCOB 3.2 Application: what?

Application for a financial promotion of qualifying credit2

MCOB 3.2.-3 R

2This chapter applies to the communication or approval of a financial promotion of qualifying credit as follows:

Application, purpose and general

MCOB 3.1 to MCOB 3.5

Form and content of non-real time qualifying credit promotions

MCOB 3.6

Unsolicited real time promotions of qualifying credit or home reversion plans

MCOB 3.7

Form and content of real time qualifying credit promotions

MCOB 3.8

Confirmation of compliance: financial promotions of qualifying credit or home reversion plans

MCOB 3.9

Records: non-real time financial promotions of qualifying credit or home reversion plans

MCOB 3.10

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

MCOB 3.11

The Internet and other electronic media

MCOB 3.12

Application for a financial promotion of a home reversion plan

MCOB 3.2.-2 R

2This chapter applies to the communication or approval of a financial promotion of a home reversion plan as follows:

Application, purpose and general

MCOB 3.1 to MCOB 3.5

Form and content of non-real time qualifying credit promotions

MCOB 3.6 in accordance with MCOB 3.8A

Unsolicited real time financial promotions of qualifying credit or home reversion plans

MCOB 3.7

Form and content of financial promotions of home reversion plans

MCOB 3.8A

Confirmation of compliance: financial promotions of qualifying credit or home reversion plans

MCOB 3.9

Records: non-real time financial promotions of qualifying credit or home reversion plans

MCOB 3.10

The Internet and other electronic media

MCOB 3.12

Application for a financial promotion of a home purchase plan

MCOB 3.2.-1 G

2The rules in this chapter do not apply to the communication or approval of a financial promotion of a home purchase plan. However, the clear, fair and not misleading standard still applies as does certain relevant guidance from this chapter (see MCOB 2.2).

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 PERG 81 (Financial promotion and related activities) and that guidance will be relevant to interpreting these rules. In particular, guidance on the meaning of:

    1
    1. (a)

      'communicate' is in PERG 8.61 (Communicate); and

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    2. (b)

      'invitation or inducement' and 'engage in investment activity' (two elements which, with 'communicate', make up the definition of 'financial promotion') is in PERG 8.41 (Invitation or inducement) and PERG 8.71 (Engage in investment activity).

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  2. (2)

    Guidance on the approval of a financial promotion of qualifying credit2 is in MCOB 3.11.1 G (Approval of qualifying credit promotions).

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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 financial promotion2communicated 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. (2)

    Financial promotions2 may be communicated for example, by means of:

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    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 financial promotion2;

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    7. (g)

      presentations to groups of customers; and

    8. (h)

      other publications, which may contain non-personal recommendations as to obtaining qualifying credit or entering into a home reversion plan.2

MCOB 3.2.3 G

Guidance on the use of the Internet for communicatingfinancial promotions2 is in MCOB 3.12 (The Internet and other electronic media) and 2PERG 8.221 (The Internet)

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Exemptions

MCOB 3.2.4 R

This chapter does not apply to a firm in relation to a financial promotion of qualifying credit2 of a kind listed in MCOB 3.2.5 R, except that if the firmapproves the financial promotion,2 the following apply:

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  1. (1)

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

  2. (2)

    MCOB 3.6.3 R (Clear,

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    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 financial promotion of qualifying credit2 by an overseas personMCOB 3.11.5 R (Non-real time qualifying credit promotions for overseas persons) applies.

    2
MCOB 3.2.4A R

2This chapter does not apply to a firm in relation to a financial promotion of a home reversion plan of a kind listed in MCOB 3.2.5 R, unless the firmapproves the financial promotion.

MCOB 3.2.5 R

This table belongs to MCOB 3.2.4 R and MCOB 3.2.4A R2.

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 financial promotion2 which contains only one or more of the following:

2

(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 financial promotion2 which can lawfully be communicated by an unauthorised person without approval;

2

(4)

a financial promotion2communicated 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 financial promotion2 is communicated were a separate unauthorised person (but see GEN 4.4.1R (Business for private customers from non-UK offices));

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MCOB 3.2.6 G

MCOB 3.2.5 R (2) exempts a financial promotion2 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 or home reversion plan2 available from the firm. Thus firms should avoid the use of names, logos or addresses, for example, which attempt to convey additional product2 or cost-related information.

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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 financial promotion2.

2

Other relevant2handbook rules2

MCOB 3.2.8 G

Firms are reminded that financial promotion2 (including those which are exempt) may be subject to more general rules, including Principle 7 (Communications with clients), SYSC 3 to SYSC 103(Systems and controls) and MCOB 2.2.6 R (Clear, fair and not misleading communication).

2
MCOB 3.2.9 G

Firms are reminded that if in the course of making a financial promotion2 of any kind an adviser gives specific advice on a home finance transaction2 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 (Equity release:2 advising and selling standards).

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