This chapter applies to a firm:

1. (1)

   communicating information to a customer in relation to a home finance transaction; or

2. (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.

1. (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:

   1. (a)

      the firm's main business must be the practice of its profession;

   2. (b)

      the financial promotion must be made for the purposes of, and incidental to, the promotion or provision by the firm of:

      1. (i)

         its professional services; or

      2. (ii)

         its non-mainstream regulated activities (see PROF 5.2 (Nature of non-mainstream activities)); and

   3. (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.

2. (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. (3)

   in (1)(b)(i), “professional services” means services:

   1. (a)

      which do not constitute a regulated activity; and

   2. (b)

      the provision of which is supervised and regulated by a designated professional body.

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. (1)

   MCOB 3A.1 (Application and purpose);

2. (2)

   MCOB 3A.2.4 R (Fair, clear and not misleading financial promotions);

3. (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. (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.

A firm may rely on more than one exemption in relation to the same financial promotion.

This chapter applies to a firm in relation to:

1. (1)

   the communication of a financial promotion to a person in the United Kingdom;

2. (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. (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;

4. (4)

   the communication or approval for communication of a financial promotion that is an electronic commerce communication to a person in an EEA State other than in the United Kingdom; and

5. (5)

   the communication or approval for communication of a financial promotion in relation to an MCD regulated mortgage contract to a person in an EEA State other than in the United Kingdom.

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. (1)

   MCOB 3A.1 (Application and purpose);

2. (2)

   rules requiring a financial promotion to be fair, clear and not misleading (see MCOB 3A.2.4 R); and

3. (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).

1. (1)

   Notwithstanding MCOB 3A.1.13 R and MCOB 3A.1.15 R, where a firm which satisfies the conditions in (2) communicates a financial promotion of qualifying credit, the rules in (3) do not apply.

2. (2)

   The conditions are that:

   1. (a)

      the firmcommunicates the financial promotion of qualifying credit from an establishment maintained by the firm in an EEA State other than the United Kingdom, and not from an establishment maintained by the firm in the United Kingdom or outside the EEA;

   2. (b)

      either that EEA State:

      1. (i)

         has implemented the Distance Marketing Directive; or

      2. (ii)

         has obligations in its domestic law corresponding to those provided for by the Distance Marketing Directive;

   3. (c)

      the financial promotion of qualifying credit relates, exclusively, to a distance contract, for the conclusion of which the obligations provided for by the Distance Marketing Directive (or corresponding obligations) are applied by that state; and

   4. (d)

      the firm is a national of an EEA State or a company or firm mentioned in article 54 of the Treaty.

3. (3)

   The rules which do not apply are:

   1. (a)

      MCOB 3A.3.2 R (Name and contact point); and

   2. (b)

      MCOB 3A.4.1R (1) and (2) (Real time qualifying credit promotions).

1. (1)

   1When a firm communicates information to a customer, it must take reasonable steps to do so in a way that is fair, clear and not misleading.

2. (2)

   A firm must be able to show that it has taken reasonable steps to ensure that any illustration or ESIS is fair, clear and not misleading.

1. (1)

   A firmcommunicating or approving a non-real time financial promotion of qualifying credit other than in (2), for a home reversion plan or a regulated sale and rent back agreement must be able to show that it has taken reasonable steps to ensure that the non-real time financial promotion is fair, clear and not misleading.

2. (2)

   A firmcommunicating a financial promotion, or approving a non-real time financial promotion in relation to an MCD regulated mortgage contract must ensure that it:

   1. (a)

      is fair, clear and not misleading; and

   2. (b)

      in particular, does not contain wording that may create false expectations for a consumer regarding the availability or the cost of a credit.

A firm which approves a financial promotion of a home purchase plan must take reasonable steps to ensure that the financial promotion is fair, clear and not misleading.

Any communication, including a non-real time financial promotion, must describe:

1. (1)

   any early repayment charge as an “early repayment charge” and not use any other expression to describe such charges;

2. (2)

   any higher lending charge as a “higher lending charge” and not use any other expression to describe such charges;

3. (3)

   any lifetime mortgage as a “lifetime mortgage” and not use any other expression to describe such a mortgage;

4. (4)

   any home reversion plan as a “home reversion plan” and not use any other expression to describe it; and

5. (5)

   any regulated sale and rent back agreement as a “sale and rent back agreement” and not use any other expression such as “equity release” to describe it.

1A firm which communicating or approving a financial promotion within MCOB 3A.2.4 R must, in addition, ensure that the financial promotion:

1. (1)

   is accurate;

2. (2)

   is balanced and, in particular, does not emphasise any potential benefits of the MCD regulated mortgage contract, other qualifying credit, home reversion plan or regulated sale and rent back agreement without also giving a fair and prominent indication of any relevant risks;

3. (3)

   is sufficient for, and presented in a way that is likely to be understood by, the average member of the group to whom it is directed, or by whom it is likely to be received;

4. (4)

   makes it clear, where applicable, that the credit is secured on the customer's home;

5. (5)

   does not disguise, omit, diminish or obscure important items, statements or warnings; and

6. (6)

   where it contains a comparison or contrast, presents the comparison or contrast in a fair and balanced way and ensures that is meaningful.

A non-real time financial promotion must contain the name of the firm or its appointed representative and either an address or a contact point from which an address is available.

A financial promotion is not a solicited financial promotion unless a firm ensures that:

1. (1)

   it is clear from all the circumstances when the call, visit or dialogue is initiated or requested that, during the course of the visit, call or dialogue, a financial promotion would be made; and

2. (2)

   a person is not to be treated as expressly requesting a call, visit or dialogue:

   1. (a)

      because they omit to indicate that they do not wish to receive any or any further visits or calls or to engage in any or any further dialogue;

   2. (b)

      because they agree to standard terms that state that such visits, calls or dialogues will take place, unless they have signified clearly that, in addition to agreeing to the terms, they are willing for them to take place.

If a financial promotion is solicited by a person (“R”), it is treated as also having been solicited by any other person to whom it is made at the same time as R if that other person is a close relative of R or is expected to enter into a home reversion plan, a regulated sale and rent back agreement or any contract for qualifying credit jointly with R.

A firm must not make a cold call of qualifying credit, a home reversion plan or a regulated sale and rent back agreement unless the customer has an established existing customer relationship with the firm and the relationship is such that the customer envisages receiving such financial promotions.

1A firm must ensure that an individual who makes a real time financial promotion of qualifying credit on the firm's behalf:

1. (1)

   makes the purpose(s) of the financial promotion clear at the initial point of communication, and identifies themself and the firm which they represent;

2. (2)

   if the time and method of communication were not previously agreed by the recipient:

   1. (a)

      checks that the recipient wishes them to proceed;

   2. (b)

      terminates the communication if the recipient does not wish them to proceed (but may ask for another appointment);

   3. (c)

      recognises and respects, promptly, the right of the recipient to:

      1. (i)

         end the communication at any time;

      2. (ii)

         refuse any request for another appointment;

3. (3)

   gives any person with whom they arrange an appointment a contact point;

4. (4)

   does not communicate with a person:

   1. (a)

      at an unsocial hour, unless the person has previously agreed to such a communication;

   2. (b)

      on an unlisted telephone number, unless the person has previously agreed to such calls on that number.

A firm must not approve a financial promotion of qualifying credit made in the course of a personal visit, telephone conversation or other interactive dialogue.

If a firmapproves a financial promotion of qualifying credit 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.

A firm must not communicate or approve a financial promotion which relates to qualifying credit provided by an overseas person, unless:

1. (1)

   the financial promotion of qualifying credit 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 taken reasonable steps to satisfy itself that the overseas person will deal with customers in the United Kingdom in an honest and reliable way.

1. (1)

   1When communicating or approving a financial promotion concerning an MCD regulated mortgage contract which indicates an interest rate or any figures relating to the cost of the credit to the consumer, a firm must ensure that the financial promotion includes standard information which specifies in a clear, concise and prominent way:

   1. (a)

      the identity of the MCD creditor or, where applicable, the creditintermediary or appointed representative;

   2. (b)

      where applicable, that the MCD regulated mortgage contract will be secured by a mortgage or another comparable security or by a right related to residential immovable property;

   3. (c)

      the borrowing rate, indicating whether this is fixed or variable or a combination of both, together with particulars of any charges included in the total cost of the credit to the consumer;

   4. (d)

      the total amount of the credit;

   5. (e)

      the APRC which must be included at least as prominently as any interest rate;

   6. (f)

      where applicable, the duration of the MCD regulated mortgage contract;

   7. (g)

      where applicable, the amount of the instalments;

   8. (h)

      where applicable, the total amount payable by the consumer;

   9. (i)

      where applicable, the number of instalments; and,

   10. (j)

       where applicable, a warning regarding the fact that possible fluctuations of the exchange rate could affect the amount payable by the consumer.

   [Note: article 11(1) and (2) of the MCD]

2. (2)

   The information listed in (1), other than that listed in (a), (b) or (j) thereof, must be specified by means of a representative example.

   [Note: article 11(3) of the MCD]

3. (3)

   For the purposes of the requirement in (2), to specify the information in (1), including the APRC, by means of a representative example, an example is not representative unless the firm reasonably expects that at least 51% of consumers:

   1. (a)

      responding to the financial promotion; and

   2. (b)

      who enter into a MCD regulated mortgage contract which is the subject of the financial promotion;

      would be charged the specified APRC or below.

   [Note: article 11(3) of the MCD]

4. (4)

   Where the conclusion of a contract regarding an ancillary service, in particular insurance, is compulsory in order to obtain the MCD regulated mortgage contract or to obtain it on the terms and conditions marketed, and the cost of that service cannot be determined in advance, the obligation to enter into that contract must be stated in a clear, concise and prominent way, together with the APRC.

   [Note: article 11(4) of the MCD]

5. (5)

   The information referred to in (1) and (4) must be easily legible or clearly audible as appropriate, depending on the medium used for advertising.

   [Note: article 11(5) of the MCD]

1If a firm uses a figure equivalent to an APR in a communication of a financial promotion of a home purchase plan, when calculating that figure it must use an approach equivalent to the APR rules.

1A firm must not approve a financial promotion of a home reversion plan made in the course of a personal visit, telephone conversation or other interactive dialogue.

A regulated sale and rent back firm must not communicate an unsolicited financial promotion that relates to a regulated sale and rent back agreement to a potential SRB agreement seller in the form of a leaflet or brochure or similar.

A non-real time financial promotion relating to a regulated sale and rent back agreement and any other advertisement which is issued by a regulated sale and rent back firm that could lead to the conclusion of a regulated sale and rent back agreement, must (unless it is of a kind listed in MCOB 3A.1.9R(1)) contain a risk warning that uses the following wording:

"If you enter into a sale and rent back agreement you are unlikely to get the market value of your home and, as a tenant, may only be able to remain there for a limited period. There may be other options available. Please ask for a key terms statement."

A firm must not in any financial promotion of a regulated sale and rent back agreement exploit the vulnerable nature or circumstances of any customer who may be in financial difficulties and at risk of losing his or her home. As such, the firm must avoid using phrases or terms such as "fast sales", "rescue" or "cash quickly" or any other similar expression.

A firm must not approve a financial promotion of a regulated sale and rent back agreement made in the course of a personal visit, telephone conversation or other interactive dialogue.

1A firm must make an adequate record of each non-real time financial promotion of qualifying credit, home reversion plan or regulated sale and rent back agreement which it has confirmed as complying with the rules in this chapter. The record must be retained for a year from the date at which the financial promotion was last communicated.