MCOB 4.9 Business loans and loans to high net worth mortgage customers: tailored provisions

1Firms are reminded that in accordance with MCOB 1.2.3 R and MCOB 1.2.3A R, they should comply in full with MCOB, but in doing so may opt to take account of all tailored provisions in MCOB that relate to business loans or loans to high net worth mortgages customers, as the case may be3. Therefore, a firm may only follow the tailored provisions in MCOB 4.9 in relation to one of these sectors if it also follows all other tailored provisions in MCOB that relate to that sector. In either case, the rest of MCOB applies in full.3.

1. (1)

   Firms are reminded that MCOB 1.2.7 R enables them to substitute an alternative for 'mortgage' in the initial disclosure in relation to a regulated mortgage contract for a business purpose or a high net worth mortgage customer 3(except in relation to 2sections 5 and 8 of any combined initial disclosure document2.

   3232
2. (2)

   MCOB 1.2.7 R also means that a firm should 3amend any combined3 initial disclosure document2 in relation to a regulated mortgage contract for a business purpose or a high net worth mortgage customer3 so that the final sentence of prescribed text in section 4 states: 'You will receive an illustration which will tell you about any fees relating to a particular [term used by the firm to describe the borrowing, for example "secured overdraft3"]'.

   323
3. (3)

   Where the initial disclosure in relation to a regulated mortgage contract for a business purpose or a high net worth mortgage customer3 makes reference to the permitted business of a firm (for example, sections 5 and 8 of the combined initial disclosure document3 may refer to a firm advising on or arranging regulated mortgage contracts) a firm can add text explaining the relevance of these descriptions. One approach may be to add an additional sentence such as: 'Secured overdrafts are referred to here as "mortgages" because they involve a charge being taken over your property'.

   33