Related provisions for REC 6.7.11
1 - 20 of 40 items.
Where the same illustration covers a regulated mortgage contract that is a combination of a repayment mortgage and an interest-only mortgage, either:(1) Section 3 of the illustration must state the amount the customer wishes to borrow as a repayment mortgage and the amount required as an interest-only mortgage; or(2) Section 3 of the illustration must summarise the repayment method as partly an interest-only mortgage and partly a repayment mortgage, and Section 4 of the illustration
An example of how the information required by MCOB 5.6.42 R(3) and MCOB 5.6.46 R may be presented when there is an initial fixed interest rate for a period of 22 months followed by the mortgage lender's standard variable interest rate for a period of 278 months is as follows:'22 payments at a fixed rate of [...]%followed by278 payments at a variable rate, currently [...]%'.
The information required by MCOB 5.6.42 R(3)(d) must exclude:(1) the cost of repaying the capital if the regulated mortgage contract is an interest-only mortgage: where part of the regulated mortgage contract is an interest-only mortgage, the cost of repaying the capital must be excluded only for that part; and(2) the cost of any products which may be sold in conjunction with the regulated mortgage contract (whether tied products or not), unless the cost has been added to the
Where all or part of the regulated mortgage contract to which the illustration relates is an interest-only mortgage:(1) the illustration must include the sub-heading 'Cost of repaying the capital' with the following text under it:'You will still owe [insert amount of loan on an interest-only basis] at the end of the mortgage term. You will need to make separate arrangements to repay this. When comparing the payments on this mortgage with a repayment mortgage, remember to add any
An example of how the information required by MCOB 5.6.52 R (1), MCOB 5.6.52 R (3) and MCOB 5.6.52 R (5) may be presented is as follows:
Cost of repaying the capitalYou will still owe £Z at the end of the mortgage term. You will need to make separate arrangements to repay this. When comparing the payments on this mortgage with a repayment mortgage, remember to add any money that you may need to pay into a separate savings plan to build up a lump sum to repay this amount. |
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Savings plan that you do not have to take out through [insert name of mortgage lender or mortgage intermediary] |
Monthly payments |
XYZ savings plan (see separate product disclosure document) |
£C |
What you will need to pay each month including the cost of a savings plan to repay the capital |
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36 payments at a fixed rate currently x% followed by: |
£(A+C) |
264 payments at a variable rate currently y%. |
£(B+C) |
Unless all of the interest rates described in MCOB 5.6.54 R(5) apply for the term of the loan part to which they apply, then an additional section numbered as 6a and titled 'What you will need to pay in future' must be included to indicate the future stepped payments (if MCOB 5.6.51 R also applies then the section on deferred interest must be numbered 6b). This section must:(1) state when a change in payment will occur;(2) state the reason for the change in payment; and(3) confirm
The fees included in this section in accordance with MCOB 5.6.66 R must be itemised under the relevant sub-headings as follows:(1) the fees that are payable by the customer to the mortgage lender must be itemised under the sub-heading 'Fees payable to [name of mortgage lender]';(2) the remaining fees must be itemised under the sub-heading 'Other fees'; and(3) (a) if there are no fees to be itemised in accordance with (1), the sub-heading must be retained and a statement must be
Under the sub-heading 'Insurance you must take out through [insert name of mortgage lender or where relevant the name of the mortgage intermediary, or both]' the following information must be included if the regulated mortgage contract requires the customer to take out insurance that is a tied product either through the mortgage lender or where relevant the mortgage intermediary:(1) details of which insurance is a tied product;(2) for how long the customer is obliged to purchase
If the regulated mortgage contract does not require the customer to take out insurance as a tied product, the sub-heading 'Insurance you must take out through [insert the name of the mortgage lender, and where relevant the name of the mortgage intermediary]' must be retained and a statement must be provided under this heading that the customer is not obliged to take out any insurance through the mortgage lender or, where relevant, the mortgage intermediary.
A firm may include in the illustration, under the sub-heading 'Optional insurance', quotations (estimated where necessary) for any insurance products (other than the insurance products covered elsewhere in the illustration in accordance with MCOB 5.6.74 R and MCOB 5.6.77 R) that the firm issuing the illustration wishes to promote to the customer.
Where the interest recalculation described in MCOB 5.6.90 R takes place immediately, firms may add a statement in this section explaining that the customer will get the benefit of the overpayment immediately, and firms may refer to supplementary information to illustrate further, the benefits of making regular overpayments.
(1) If none of the features at MCOB 5.6.94 R are applicable to the regulated mortgage contract to which the illustration relates, the section headed 'Additional features' must be retained, but the sub-headings must not be included and a statement must be added to explain that there are no additional features.(2) Only those features available on the regulated mortgage contract need be included in the illustration.(3) If a firm provides a customer with supplementary information
The relevant sub-headings are as follows:(1) 'Underpayments';(2) 'Payment holidays';(3) 'Borrow back';(4) 'Incentives';(5) 'Additional borrowing available without further approval';(6) 'Additional secured borrowing';(7) 'Credit card';(8) 'Unsecured borrowing';(9) 'Linked current account'; and(10) 'Linked savings account'.
Under the section heading 'Are you comfortable with the risks?':(1) under the sub-heading 'What if interest rates go up?' the illustration must include the following:(a) if the interest rate is fixed throughout the term of the regulated mortgage contract, an explanation that the interest rate will not vary because the interest rate is fixed;(b) if the interest rate is fixed for part of the term of the regulated mortgage contract, an explanation of when or how increases in the
Schedule to the Recognition Requirements Regulations, paragraph 3
(1) |
The [UK RIE] must ensure that the systems and controls used in the performance of its [relevant functions] are adequate, and appropriate for the scale and nature of its business. |
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(2) |
Sub-paragraph (1) applies in particular to systems and controls concerning - |
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(a) |
the transmission of information; |
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(b) |
the assessment and management of risks to the performance of the [UK RIE'srelevant functions]; |
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(c) |
the effecting and monitoring of transactions on the [UK RIE]; |
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(d) |
the operation of the arrangements mentioned in paragraph 4(2)(d); and |
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(e) |
(where relevant) the safeguarding and administration of assets belonging to users of the [UK RIE's] facilities.1 |
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The following paragraphs set out other matters to which the FSA may have regard in assessing the systems and controls used for the transmission of information, risk management, the effecting and monitoring of transactions, the operation of settlement arrangements (the matters covered in paragraphs 4(2)(d) and 19(2)(b) of the Schedule to the Recognition Requirements Regulations) and the safeguarding and administration of assets .
In assessing a UK recognised body's systems and controls for the transmission of information, the FSA may also have regard to the extent to which these systems and controls ensure that information is transmitted promptly and accurately: (1) within the UK recognised body itself; (2) to members; and (3) (where appropriate) to other market participants or other relevant persons.
(1) The Takeover Panel publishes notices regarding compliance with the Takeover Code and SARs. It may also, from time to time, name in those notices persons as persons that, in the Takeover Panel's opinion, are not likely to comply with the Takeover Code or the SARs. Any notices of this type will be available on the Takeover Panel's website (www.thetakeoverpanel.org.uk).(2) A firm should keep itself informed of Takeover Panel notices and take them into account in seeking to comply
A firm must provide to the Takeover Panel:(1) any information and documents in its possession or under its control which the Takeover Panel requests to enable the Takeover Panel to perform its functions; and(2) such assistance as the Takeover Panel requests and as the firm is reasonably able to provide to enable the Takeover Panel to perform its functions.
MCOB 7.6.20 R allows a firm to make changes to wording and to add, remove or alter information that would otherwise be misleading to the customer. For example, a firm could replace the statement in Section 3 of the illustration, explaining that if information provided by the customer changes, the illustration may be affected, with a statement explaining that the illustration is based on information gathered in the past, which may no longer be accurate.
MCOB 7.6.25 R allows the firm to make changes to wording and to add, remove or alter information that would otherwise be misleading to the customer. For example, a firm may choose not to include a property valuation in the 'What you have told us' section of the illustration if the property value does not have a bearing on the terms of the regulated mortgage contract.
In determining whether a customer is a large business customer for the purposes of MCOB 1.2.3 R(1), a firm will need to have regard to the figure given for the customer's annual turnover in the customer's annual report and accounts or business plan. In addition, a firm may rely on information provided by the customer about the annual turnover, unless, taking a common-sense view of this information, it has reason to doubt it.
(1) The guidance relevant to delegation within the firm is also relevant to external delegation ('outsourcing'). A firm cannot contract out its regulatory obligations. So, for example, under Principle 3 a firm should take reasonable care to supervise the discharge of outsourced functions by its contractor.(2) A firm should take steps to obtain sufficient information from its contractor to enable it to assess the impact of outsourcing on its systems and controls.
It is the responsibility of the firm to decide what information is required, when, and for whom, so that it can organise and control its activities and can comply with its regulatory obligations. The detail and extent of information required will depend on the nature, scale and complexity of the business.
The Code is not exhaustive in its descriptions of behaviour that does or does not amount to market abuse. In circumstances where a person is proposing to undertake an innovative transaction, he should consider it in the light of the guidance provided in sections MAR 1.4 - MAR 1.6. It is also open to a person to consider seeking guidance from the FSA in respect of the proposed behaviour. Similarly, members of an RIE may wish to seek guidance from the relevant exchange on the consistency
At the end of Section 4 of the illustration a statement must be included making clear that changes to any of the information obtained from the customer, and where appropriate to the valuation of the property, could alter the details elsewhere in the illustration and encouraging the customer to ask for a revised illustration in this event.
The FSA may require further information from the applicant and may need to have discussions with the appropriate authorities in the applicant's home territory. To allow sufficient time for applications to be processed and for the necessary contacts to be made with the appropriate home territory authorities, applications should be made not later than six months before the applicant wishes the recognition order to take effect. No guarantee can be given that a decision will be reached
In appropriate circumstances, it may be cost effective for the FSA to nominate or approve the appointment of a skilled person who has previously acted for, or advised, the person in SUP 5.2.1 G. For example, the FSA may nominate, or approve the appointment of, the auditor of a person in SUP 5.2.1 G to prepare a report taking into account, where relevant, the considerations set out in SUP 5.4.7 G.
In
determining whether or not an approved person's conduct
under APER 4.4.4 E complies with Statement of Principle 4,
the following are factors which, in the opinion of the FSA, are to be taken into account:(1) the
likely significance to the FSA of the information which it was
reasonable for the individual to assume;(2) whether
the information related to the individual himself or to his firm;(3) whether
any decision not to report the matter internally was taken after reasonable
enquiry
In
determining whether or not an approved person's conduct
under APER 4.4.7 E complies with Statement of Principle 4(APER
2.1.2 P), the following are factors which, in
the opinion of the FSA, are to be taken into account:(1) the
likely significance of the information to the FSA which it was reasonable for the approved person to assume;(2) whether
any decision not to inform the FSA was taken after reasonable enquiry
and analysis of the situation.
An application should:(1) be
made in accordance with any directions the FSA may make under section 287 (Application by an investment exchange) or section 288 (Application by a clearing
house) of the Act;(2) be accompanied by the applicant's regulatory
provisions (the material specifically prescribed in section 287 or section
288);(3) be
accompanied by the information, evidence and explanatory material (including
supporting documentation) necessary to demonstrate to the FSA that
(1) The FSA will
keep the applicant informed of the progress of the application.(2) It
may be necessary to ask the applicant to clarify or amplify some aspects of
its proposals. The FSA may wish to discuss various aspects of the application and may
invite the applicant to attend one or more meetings for that purpose. When
requested to do so, the FSA will explain the nature of the information which it has asked
an applicant to supply in connection with its application.
The Principles
1 Integrity |
A firm must conduct its business with integrity. |
2 Skill, care and diligence |
A firm must conduct its business with due skill, care and diligence. |
3 Management and control |
A firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems. |
4 Financial prudence |
A firm must maintain adequate financial resources. |
5 Market conduct |
A firm must observe proper standards of market conduct. |
6 Customers' interests |
A firm must pay due regard to the interests of its customers and treat them fairly. |
7 Communications with clients |
A firm must pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading. |
8 Conflicts of interest |
A firm must manage conflicts of interest fairly, both between itself and its customers and between a customer and another client. |
9 Customers: relationships of trust |
A firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for any customer who is entitled to rely upon its judgment. |
10 Clients' assets |
A firm must arrange adequate protection for clients' assets when it is responsible for them. |
11 Relations with regulators |
A firm must deal with its regulators in an open and cooperative way, and must disclose to the FSA appropriately anything relating to the firm of which the FSA would reasonably expect notice. |