MCOB 3A.1 1Application and purpose
Who?
This chapter applies to a firm:
- (1)
communicating information to a customer in relation to a home finance transaction; or
- (2)
communicating or approving a financial promotion of qualifying credit, a home reversion plan, a home purchase plan or a regulated sale and rent back agreement.
As a result of this chapter and CONC 3:
-
(1)
a financial promotion is not subject to CONC 3to the extent that it relates to qualifying credit; and
-
(2)
where a firm makes a communication which consists of a financial promotion of qualifying credit and a financial promotion of a 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 CONC 3.
Authorised professional firms
- (1)
Except for MCOB 3A.5, MCOB 3A does not apply to an authorised professional firm in relation to the communication of a financial promotion if the following conditions are satisfied:
- (a)
the firm's main business must be the practice of its profession;
- (b)
the financial 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 financial promotion must not be communicated on behalf of another person who would not be able lawfully to communicate the financial promotion if they were acting in the course of business.
- (a)
- (2)
in (1)(a), a firm's professional business practice is not the “main business” of the firm unless the proportion of income it derives from professional fees is, during its annual accounting period, at least 50% of the firm's total income (a temporary variation of not more than 5% may be disregarded for this purpose).
- (3)
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)
Application for a financial promotion of qualifying credit
This chapter applies to the communication or approval of a financial promotion of qualifying credit as follows:
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Application and purpose |
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The fair, clear and not misleading rules |
MCOB 3A.2 , except MCOB 3A.2.5 R |
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Other general requirements for financial promotions |
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Qualifying credit financial promotions |
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MCD financial promotions (note 1) |
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Systems and controls |
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Note 1: This item does not apply to non-MCDfinancial promotions of qualifying credit. |
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Application for a financial promotion of a home reversion plan
This chapter applies to the communication or approval of a financial promotion of a home reversion plan as follows:
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Application and purpose |
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The fair, clear and not misleading rules |
MCOB 3A.2 , except MCOB 3A.2.5 R |
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Other general requirements for financial promotions |
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Home reversion plan financial promotions |
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Systems and controls |
Application for a financial promotion of a regulated sale and rent back agreement
This chapter applies to the communication or approval of a financial promotion of a regulated sale and rent back agreement as follows:
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Application and purpose |
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The fair, clear and not misleading rules |
MCOB 3A.2 , except MCOB 3A.2.5 R |
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Other general requirements for financial promotions |
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Sale and rent back financial promotions |
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Systems and controls |
Application for a financial promotion of a home purchase plan
This chapter applies to the communication or approval of a financial promotion of a home purchase plan as follows:
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Application and purpose |
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Fair, clear and not misleading rule for approval of home purchase plan financial promotions |
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Home purchase plan financial promotions |
Exemptions
Except for MCOB 3A.2.4R (2) and MCOB 3A.5, this chapter does not apply to a firm in relation to a financial promotion of qualifying credit that is of a kind listed in MCOB 3A.1.9 R, except if the firm approves the financial promotion, then the following apply:
- (1)
MCOB 3A.1 (Application and purpose);
- (2)
MCOB 3A.2.4 R (Fair, clear and not misleading financial promotions);
- (3)
MCOB 3A.4.4 G to MCOB 3A.4.7 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)
if the firm approves a non-real time financial promotion of qualifying credit by an overseas personMCOB 3A.4.8 R (Non-real time qualifying credit promotions for overseas persons) applies.
This table belongs to MCOB 3A.1.8 R.
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Exemptions |
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This chapter does not apply to the following: |
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(1) |
a financial promotion which contains only one or more of the following |
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(a) |
the name of the firm (or its appointed representative); |
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(b) |
a logo; |
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(c) |
a contact point (address (including an email address), telephone or facsimile number); |
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(d) |
a brief, factual statement of the firm's (or its appointed representative's) main occupation; |
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(2) |
a financial promotion which can lawfully be communicated by an unauthorised person without approval; |
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(3) |
a financial promotion communicated 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 promotion is communicated were a separate unauthorised person (but see GEN 4.4.1 R (Business for private customers from non-UK offices)). |
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Combination of exemptions
A firm may rely on more than one exemption in relation to the same financial promotion.
Other relevant provisions3
Firms are reminded that financial promotions (including those which are exempt) may be subject to more general rules, including Principle 7 (Communications with clients), SYSC 3 to SYSC 10 (Systems and controls), and MCOB 3A.2.4 R (Fair, clear and not misleading communications).
-
(1)
3Firms are also reminded that the effect of section 55NA of the Act is that4 a firm is unable to approve a financial promotion unless:
- (a)
the firm is a permitted approver in relation to the financial promotion; or
- (b)
an approver permission exemption applies.
- (a)
-
(2)
SUP 6A contains guidance on applying for approver permission.
Territorial scope
The territorial scope for rules relating to communicating information to a customer is set out in MCOB 1.3.1 R.
This chapter applies to a firm in relation to:
- (1)
the communication of a financial promotion to a person in the United Kingdom;
- (2)
the communication of a cold call of qualifying credit, a home reversion plan or a regulated sale and rent back agreement, unless it is made from a place, and for the purposes of a business which is only carried on, outside the United Kingdom;
- (3)
the approval of a non-real time financial promotion of qualifying credit, a home reversion plan or a regulated sale and rent back agreement for communication to a person in the United Kingdom.2
- (4)
[deleted]2
- (5)
[deleted]2
The application under MCOB 3A.1.13 R is relevant both when a firmcommunicates a financial promotion itself and when a firmapproves a non-real time financial promotion for communication by others. However, see also MCOB 3A.1.15 R (Exceptions to territorial scope: rules without territorial limitation for approval of financial promotions).
Exceptions to territorial scope: rules without territorial limitation for approval of financial promotions
Subject to MCOB 3A.1.16 R, the following parts of this chapter apply without any territorial limitation if a firmapproves a financial promotion of qualifying credit, a home reversion plan or a regulated sale and rent back agreement:
- (1)
MCOB 3A.1 (Application and purpose);
- (2)
rules requiring a financial promotion to be fair, clear and not misleading (see MCOB 3A.2.4 R); and
- (3)
provisions regarding the approval of financial promotions (except those relating to approval of financial promotions of qualifying credit provided by an overseas person) (see MCOB 3A.4.4 G to MCOB 3A.4.7 G, MCOB 3A.7.1 R and MCOB 3A.8.5 R).