Related provisions for MCOB 9.4.138

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COLL 5.7.2GRP
(1) This section contains rules on the types of permitted investments and any relevant limits with which non-UCITS retail schemes operating as FAIFs must comply. These rules allow for the relaxation of certain investment and borrowing powers from the requirements for non-UCITS retail schemes under COLL 5.6 .(2) One example2 of the different investment and borrowing powers under the rules in this section for non-UCITS retail schemes operating as FAIFs is the power to invest up
COLL 5.7.5RRP
(1) This rule does not apply in respect of government and public securities.(2) Not more than 20% in value of the scheme property is to consist of deposits with a single body.(3) Not more than 10% in value of the scheme property is to consist of transferable securities or approved money-market instruments issued by any single body subject to COLL 5.6.23 R (Schemes replicating an index).(4) The limit of 10% in (3) is raised to 25% in value of the scheme property in respect of covered
COLL 5.7.11GRP
An authorised fund manager carrying out due diligence for the purpose of the rules in this section should make enquiries or otherwise obtain information needed to enable him properly to consider:(1) whether the experience, expertise, qualifications and professional standing of the second scheme's investment manager is adequate for the type and complexity of the second scheme;(2) the adequacy of the regulatory, legal and accounting regimes applicable to the second scheme and its
DISP 1.3.2AGRP
416These procedures should, taking into account the nature, scale and complexity of the respondent's business, ensure that lessons learned as a result of determinations by the Ombudsman are effectively applied in future complaint handling, for example by:(1) relaying a determination by the Ombudsman to the individuals in the respondent who handled the complaint and using it in their training and development;(2) analysing any patterns in determinations by the Ombudsman concerning
DISP 1.3.3RRP
In respect of complaints that do not relate to MiFID business, a respondent must put in place appropriate management controls and take reasonable steps to ensure that in handling complaints it identifies and remedies any recurring or systemic problems, for example, by: 1(1) analysing the causes of individual complaints so as to identify root causes common to types of complaint;(2) considering whether such root causes may also affect other processes or products, including those
DTR 2.5.4GRP
(1) does not envisage that an issuer will: DTR 2.5.3 R (1) does not allow an issuer to delay public disclosure of the fact that it is in financial difficulty or of its worsening financial condition and is limited to the fact or substance of the negotiations to deal with such a situation. An issuer cannot delay disclosure of inside information on the basis that its position in subsequent negotiations to deal with the situation will be jeopardised by the disclosure of its financial
DTR 2.5.7GRP
(1) When an issuer is permitted to delay public disclosure of inside information in accordance with DTR 2.5.1 R, it may selectively disclose that information to persons owing it a duty of confidentiality.(2) Such selective disclosure may be made to another person if it is in the normal course of the exercise of his employment, profession or duties. However, selective disclosure cannot be made to any person simply because they owe the issuer a duty of confidentiality. For example,
MCOB 13.6.3RRP
A firm must ensure that, as soon as possible after the sale of a repossessed property, if the proceeds of sale are less than the amount due under the regulated mortgage contract or home purchase plan1, the customer is informed in a durable medium of:1(1) the sale shortfall; and(2) where relevant, the fact that the sale shortfall1may be pursued by another company (for example, a mortgage indemnity insurer).1
MCOB 13.6.5GRP
A firm is not required 1to recover a sale shortfall.1 A firm may not wish to recover the sale shortfall1in some situations, for example where the sums involved make action for recovery unviable.111
SYSC 19C.2.2GRP
(1) If a firm'sremuneration policy is not aligned with effective risk management, it is likely that employees will have incentives to act in ways that might undermine effective risk management. (2) The BIPRU Remuneration Code covers all aspects of remuneration that could have a bearing on effective risk management including salaries, bonuses, long-term incentive plans, options, hiring bonuses, severance packages and pension arrangements. In applying the BIPRU Remuneration Code,
SYSC 19C.2.6GRP
Remuneration includes, for example, payments made by a seconding organisation which is not subject to the BIPRU Remuneration Code to a secondee in respect of their employment by a firm which is subject to the BIPRU Remuneration Code.
MCOB 8.3.1AGRP
3The rules and guidance that are not relevant to home reversion plans are those related, for example, to interest rates, APR, higher lending charge, mortgage credit cards, multi-part mortgages and foreign currency mortgages.
MCOB 8.3.1BGRP
3Firms should substitute equivalent home reversion terminology for lifetime mortgage terminology, where appropriate. Examples of terms and expressions that should be replaced in relation to home reversion plans are 'loan' or 'amount borrowed', which should be replaced with 'amount released' or 'amount to be released', as appropriate, and 'mortgage lender' and 'mortgage intermediary' which should be replaced with 'reversion provider' and 'reversion intermediary'.
MCOB 5.1.7GRP
(1) MCOB 5.1.3 R means that this chapter applies where the customer can apply to enter into a home finance transaction2. This includes circumstances where, for example, the means to apply is provided in person, by telephone, through a website or through an application pack sent through the post.2(2) The effect of this chapter is to require a customer to be provided with key information about a home finance transaction before he submits an application to a home finance provide
MCOB 5.1.9GRP
In relation to a regulated mortgage contract, where2 part of the loan is not a regulated mortgage contract, for example it is a linked unsecured loan, the details of this loan can be shown in Section 12 of the illustration as an additional feature. It should not be added to the regulated mortgage contract loan amount in MCOB 5.6.6 R(2).2
DISP App 3.1.5GRP
In this appendix:(1) "historic interest" means the interest the complainant paid to the firm because a single premium payment protection contract was added to a loan or credit product;(2) "simple interest" means a non-compound rate of 8% per annum; and(3) "claim" means a claim by a complainant seeking to rely upon the policy under the payment protection contract that is the subject of the complaint.
MCOB 4.6.1GRP
A consumer2 has no right to cancel a home finance transaction1 concluded with a firm but may have a right to cancel a distance contract concluded with a mortgage intermediary,3 a home purchase intermediary or a SRB intermediary31for the provision of his services. Whether a mortgage intermediary,3 a home purchase intermediary or a SRB intermediary31 concludes a distance mortgage mediation contract,3 a distance home purchase mediation contract or a distance regulated sale and rent
MCOB 4.6.9GRP
Regulation 11 (Automatic cancellation of an attached distance contract) of the Distance Marketing Regulations, has the effect that when notice of cancellation is given in relation to a contract, that notice also operates to cancel any attached contract, which is also a distance financial services contract. An example of such an attached contract might be a distance non-investment insurance contract.
PR 2.4.2GRP
Information under the TD2 that may be incorporated by reference includes, for example, annual accounts and annual reports, interim management statements,2 equivalent information made available to markets in the United Kingdom,42 half yearly reports and reports on payments to governments4.2422
PR 2.4.6EURP

Article 28 of the PD Regulation provides examples of information that may be incorporated by reference:

Arrangements for incorporation by reference

1.

Information may be incorporated by reference in a prospectus or base prospectus, notably if it is contained in one the following documents:

(1)

annual and interim financial information;

(2)

documents prepared on the occasion of a specific transaction such as a merger or demerger;

(3)

audit reports and financial statements;

(4)

memorandum and articles of association;

(5)

earlier approved and published prospectuses and/or base prospectuses;

(6)

regulated information;

(7)

circulars to security holders.

2.

The documents containing information that may be incorporated by reference in a prospectus or base prospectus or in the documents composing it shall be drawn up following the provisions of [PR 4.1 (Use of languages)].

3.

If a document which may be incorporated by reference contains information which has undergone material changes, the prospectus or base prospectus shall clearly state such a circumstance and shall give the updated information.

4.

The issuer, the offeror or the person asking for admission to trading on a regulated market may incorporate information in a prospectus or base prospectus by making reference only to certain parts of a document, provided that it states that the non-incorporated parts are either not relevant for the investor or covered elsewhere in the prospectus.

5.

When incorporating information by reference, issuers, offerors or persons asking for admission to trading on a regulated market shall endeavour not to endanger investor protection in terms of comprehensibility and accessibility of the information.
3
MCOB 7.5.2RRP
Where a tied product is operated separately from the regulated mortgage contract, for example where the premiums on a tied insurance product are not combined with payments on the regulated mortgage contract, the statement required by MCOB 7.5.1 R in relation to the tied product may be provided in a separate communication.
MCOB 7.5.6GRP
Whether a firm is likely to provide the information set out in MCOB 7.5.3 R(2) more frequently than once a year will depend on the nature of the regulated mortgage contract. In determining how frequently to provide that information, a firm should take into account the need to keep the customer informed of any changes in the amount they owe, the customer's expectations and, where appropriate, the duration of the loan. For example, for a mortgage credit card the information might
SYSC 19D.2.2GRP
(1) The dual-regulated firms Remuneration Code covers all aspects of remuneration that could have a bearing on effective risk management, including salaries, bonuses, long-term incentive plans, options, hiring bonuses, severance packages and pension arrangements.(2) As with other aspects of a firm's systems and controls, in accordance with SYSC 4.1.2R (general organisational requirements) remuneration policies, procedures and practices must be comprehensive and proportionate to
SYSC 19D.2.5GRP
For example, remuneration includes payments made by a seconding organisation which is not subject to the dual-regulated firms Remuneration Code to a secondee in respect of their employment by a firm which is subject to the dual-regulated firms Remuneration Code.
CASS 8.1.2BGRP
(1) 3CASS 8.1.2A R is not an absolute exemption, but it excludes the application of the mandate rules in relation to money or assets that a firm has received, is holding, or is responsible for (as appropriate and in the circumstances described in CASS 8.1.2A R).(2) This means that, for example in respect of CASS 8.1.2A R (1), a firm holding client money in accordance with CASS 5 or CASS 7 does not also need to comply with the mandate rules in relation to the client money which
CASS 8.1.4AGRP
3The mandate rules only apply to a firm that has a mandate, and do not affect the duties of any other person to whom the firm is able to give the types of instructions referred to in CASS 8.2.1R (4). For example, if a person (A) has accepted a deposit from a client, and a firm (B) has a mandate in respect of that client'sdeposit held by A, the mandate rules only apply to B, and do not affect the duties of A in relation to the deposit.
CONC 8.9.1GRP
The Principles (in particular Principle 6 and Principle 7) apply to actions of a firm dealing with a customer who has been referred to it through a lead generator. For example, where a firm acts on a sales lead and knows or ought to know that the lead generator is using misleading information, advice or actions to obtain a customer's personal data is likely to amount to a breach by the firm of Principle 6 and Principle 7.
CONC 8.9.6GRP
Claiming or implying a person is or represents, for example, a charitable organisation is likely to include operating a website which looks like, or is designed to look like, the website of such an organisation.
MCOB 2.3.5GRP
MCOB 2.3.2 R does not prevent a firm: (1) assisting a home finance intermediary2 so that the quality of the home finance intermediary's2 service to customers is enhanced; or 22(2) giving or receiving indirect benefits (such as gifts, hospitality and promotional competition prizes); providing in either case this is not likely to give rise to a conflict with the duties that the recipient owes to the customer. In particular, such benefits should not be of a kind or value that is
MCOB 2.3.6RRP
(1) A firm must not operate a system of giving or offering inducements to a mortgage intermediary, reversion intermediary,2SRB intermediary3 or any other third party whereby the value of the inducement increases if the intermediary2 or third party, such as a packager, exceeds a target set for the amount of business referred (for example, a volume override). 2(2) A firm must not solicit or accept an inducement whereby the value of the inducement increases if the firm exceeds a
CONC 5.3.1GRP
(1) In making the creditworthiness assessment or the assessment required by CONC 5.2.2R (1), a firm should take into account more than assessing the customer's ability to repay the credit. [Note: paragraph 4.2 of ILG](2) The creditworthiness assessment and the assessment required by CONC 5.2.2R (1) should include the firm taking reasonable steps to assess the customer's ability to meet repayments under a regulated credit agreement in a sustainable manner without the customer incurring
CONC 5.3.8GRP
An example of where a firm ought reasonably to suspect that the customer has not been truthful may be that the information supplied by the customer concerning income or employment status is clearly inconsistent with other available information.
PERG 2.6.11HGRP
  1. (1)

    The main provision within the definition of alternative debenture arrangements that seeks to ensure that only instruments that display the characteristics of a debt security can be alternative debentures is set out at PERG 2.6.11CG (5). It provides that the amount of additional payments under the arrangements must not exceed an amount which would, at the time the bond is issued, be a reasonable commercial return on a loan of capital. Where the return is not fixed at the outset, it is the maximum possible amount of the additional payments that must be considered in deciding this question. The following example demonstrates how this condition should be approached.

    2. Example

    ABC Ltd is a property development company. It wishes to increase its portfolio on a short-term basis. It issues 5-year sukuk to investors and uses the proceeds to buy the head lease of a commercial property. The rental income from the lease is distributed to investors in proportion to their holdings without a cap on the level of return. After 5 years, the head lease is sold on at a profit and the proceeds shared between investors.

    In this example, the investors participate directly in the success or failure of the underlying property business. The sakk is not really in the nature of a debt instrument. It is unlikely to be an alternative debenture as:

    • additional payments under the arrangements would exceed a reasonable commercial return on a loan of the capital.

      Further, where the return is not fixed at the outset, it is the maximum possible amount of the additional payments that must be considered. Here, the issue terms of the sukuk impose no upper limit on the amount of the periodic distributions: a sakk holder subscribing 1,000 may, in a year, get back 200 or 2,000 or nothing depending on the rental market. The maximum potential return is clearly in excess of a reasonable commercial return on a loan of 1,000; and

    • the arrangements have not been admitted to an official list or admitted to trading on a regulated market or recognised investment exchange (see PERG 2.6.11CG (6)).
  2. (2)

    If, in the above example, investors returns were capped at 500 per sakk per year, then this is the amount that must be considered in deciding whether the return exceeds a reasonable commercial return on a loan, even where the amounts actually received turn out to be far lower.

  3. (3)

    In applying the reasonable commercial return test, the sakk should be compared to a hypothetical loan to the issuer on similar terms and carrying similar risks. For example, a conventional security convertible into shares will normally carry a lower rate of interest because the conversion right has a value. The return on an exchangeable or convertible sakk should be measured against the return on an equivalent exchangeable or convertible debt security.

  4. (4)

    The risk to investors in sukuk may vary slightly from that of a conventional bond in some instances. This may be due to the fact that sukuk holders only have recourse to the bond assets or some other structural feature which results in the risk profile being higher. In such instances it may be justifiable for the rate of return to be slightly higher than that of a conventional loan.

  5. (5)

    As with any financial instrument, the pricing of sukuk will depend on the issuers view of the market at the time of issue and reasonable commercial return may vary depending on the issuer and the economic circumstances prevalent at the time of issue.

BIPRU 7.10.27GRP
A firm may meet the requirement in BIPRU 7.10.26R by using different model parameters and employing a suitable adjustment mechanism to produce a figure which is equivalent to the figure produced using the parameters set out in BIPRU 7.10.26R. For example, a firm's model may use a 95% one-tailed confidence limit if the firm has a mechanism to convert the output of the model to reflect a 99% one-tailed confidence limit.
BIPRU 7.10.47GRP
This paragraph provides guidance onBIPRU 7.10.46 R (2). Take as an example a VaR model based on a factor model or on a historical simulation model. The ability of the model to explain price variation could be demonstrated by a statistical comparison over the same period of time between actual price changes on the portfolio and the profit and loss impact of risk factors included within the model. A firm may wish to include an estimate of residual variation not explained by the
BIPRU 7.10.54GRP
For example, BIPRU 7.10.53R might involve creating and documenting a prudent incremental PRR charge for the risk not captured in the VaR model and holding sufficient capital resources against this risk. In that case the firm should hold capital resources at least equal to its capital resources requirement as increased by adding this incremental charge to the model PRR. Alternatively the firm may make valuation adjustments through its profit and loss reserves to cover this material
LR 5.5.3GRP
(1) The FCA will not automatically suspend, cancel or restore the listing of securities at the request of an overseas exchange or overseas authority (for example, if listing of a listed3issuer'ssecurities are suspended, cancelled or restored on its home exchange).(2) The FCA will not normally suspend the listing of securities where there is a trading halt for the security on its home exchange.(3) If a listedissuer3 requests a suspension, cancellation or restoration of the listing
REC 3.16.1GRP
The purpose of REC 3.16 is to ensure that the FCA1receives a copy of the UK recognised body's plans and arrangements for ensuring business continuity if there are major problems with its computer systems. The FCA1does not need to be notified of minor revisions to, or updating of, the documents containing a UK recognised body's business continuity plan (for example, changes to contact names or telephone numbers). 11