Related provisions for ICOBS 2.2.3

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CONC 3.5.5RRP
(1) The representative example in CONC 3.5.3R (1) must comprise the following items of information: (a) the rate of interest, and whether it is fixed or variable or both, expressed as a fixed or variable percentage applied on an annual basis to the amount of credit drawn down;(b) the nature and amount of any other charge included in the total charge for credit;(c) the total amount of credit;(d) the representative APR;(e) in the case of credit in the form of a deferred payment
CONC 3.5.6GRP
(1) The representative example in CONC 3.5.5 R should not be limited to being representative of agreements featured in the financial promotion if the firmcommunicating or approving the financial promotion expects other agreements to be entered into as a result of the financial promotion, whether with the firm or with a third party. [Note: paragraph 6.8 of BIS Guidance on regulations implementing the Consumer Credit Directive](1A) Firms are referred to the Glossary definition of
CONC 3.5.10RRP
(1) A financial promotion must include a clear, concise and prominent3 statement in respect of any obligation to enter into a contract for an ancillary service where:(a) the conclusion of that contract is compulsory in order to obtain the credit or to obtain it on the terms and conditions promoted; and (b) the cost of that ancillary service cannot be determined in advance.[Note: regulation 8 of CCAR 2010](2) The statement in (1) must be presented together with any representative
PERG 8.14.31GRP
The exemption is subject to certain conditions. In broad terms, these are that the financial promotion must be accompanied by an indication:(1) that the directors or promoters of the company have taken all reasonable care to ensure that the financial promotion is true and not misleading;(2) that the directors or promoters have not limited their liability;(3) that any person who is in doubt about the investment should consult an authorised person; and(4) that:(a) the directors
COBS 4.2.1RRP
(1) A firm must ensure that a communication or a financial promotion is fair, clear and not misleading.(2) This rule applies in relation to:(a) a communication by the firm to a client in relation to designated investment business other than a third party prospectus;(b) a financial promotioncommunicated by the firm that is not:(i) an excluded communication;(ii) a non-retail communication;(iii) a third party prospectus; and(c) a financial promotion approved by the firm.[Note: article
COBS 4.2.4GRP
A firm should ensure that a financial promotion:(1) for a product or service that places a client's capital at risk makes this clear;(2) that quotes a yield figure gives a balanced impression of both the short and long term prospects for the investment;(3) that promotes an investment or service whose charging structure is complex, or in relation to which the firm will receive more than one element of remuneration, includes the information necessary to ensure that it is fair, clear
COBS 4.2.5GRP
2A communication or a financial promotion should not describe a feature of a product or service as “guaranteed”, “protected” or “secure”, or use a similar term unless:24(1) that term is capable of being a fair, clear and not misleading description of it; and(2) the firm communicates all of the information necessary, and presents that information with sufficient clarity and prominence, to make the use of that term fair, clear and not misleading.45
COBS 4.2.6RRP
1If, in relation to a particular communication or financial promotion, a firm takes reasonable steps to ensure it complies with the fair, clear and not misleading rule, a contravention of that rule does not give rise to a right of action under section 138D of the Act.
CONC 3.1.4RRP
The clear fair and not misleading rule in CONC 3.3.1 R and the general requirements rule in CONC 3.3.2 R and the guidance inCONC 3.3.5 G to CONC 3.3.11 G also, unless a rule or guidance in those paragraphs specifies differently, apply to:(1) a communication with a customer in relation to debt counselling or debt adjusting; and(2) the communication or approval for communication of a financial promotion in relation to debt counselling or debt adjusting.
CONC 3.1.7RRP
(1) CONC 3 does not apply (apart from the provisions in (2)) to a financial promotion or communication that consists of only one or more of the following:(a) the name or a trading name 3of the firm (or its appointed representative);(b) a logo;(c) a contact point (address (including e-mail address), telephone, facsimile number and website address);(d) a brief, factual description of the type of product or service provided by the firm.(2) The provisions in CONC 3 which apply to
CONC 3.3.1RRP
(1) A firm must ensure that a communication or a financial promotion is clear, fair, and not misleading. [Note: paragraphs 2.2 of ILG, 3.16 of DMG and 3.1 of CBG](1A) A firm must ensure that each communication and each financial promotion:3(a) is clearly identifiable as such;3(b) is accurate;3(c) is balanced and, in particular, does not emphasise any potential benefits of a product or service without also giving a fair and prominent indication of any relevant risks;3(d) is sufficient
COBS 4.10.10RRP
(1) A firm (A) will not contravene any of the financial promotion rules if it communicates a financial promotion which has been produced by another person and:(a) A takes reasonable care to establish that another firm (B) has confirmed that the financial promotion complies with the financial promotion rules;(b) A takes reasonable care to establish that it communicates the financial promotion only to recipients of the type for whom it was intended at the time B carried out the
ICOBS 2.2.2RRP
When a firm communicates information, including a financial promotion, to a customer or other policyholder, it must take reasonable steps to communicate it in a way that is clear, fair and not misleading.
CONC 3.9.2GRP
(1) The clear, fair and not misleading rule in CONC 3.3.1 R applies to a communication with a customer or the communication or approval for1communication of a financial promotion in relation to debt counselling or debt adjusting and in relation to a communication with a customer in relation to providing credit information services. (2) In the light of the complexity of debt counselling, it is unlikely that media which provide restricted space for messages would be a suitable means
CONC 3.9.5RRP
A financial promotion or a communication with a customer by a firm must not:(1) falsely claim or imply that the help and debt advice is provided on a free, impartial or independent basis, where the firm has a profit-seeking motive; [Note: paragraph 3.18b of DMG](2) falsely claim or imply4 in any way that the firm is, or represents, a charitable or not-for-profit body or government or local government organisation; [Note: paragraph 3.18c of DMG](3) promote a claims management
CONC 3.7.4GRP
A firm should in a financial promotion or in a communication with a customer:(1) make clear, to the extent an average customer of the firm would understand, the nature of the service that the firm provides; [Note: paragraphs 3.7e and 4.8b of CBG](2) indicate to the customer in a prominent way the existence of any financial arrangements with a lender that might impact upon the firm's impartiality in promoting a credit1 product to a customer;[Note: paragraphs 2.2, 6th bullet and
COBS 18.11.2RRP
COBS does not apply to an authorised professional firm with respect to its non-mainstream regulated activities, except that:(1) the fair, clear and not misleading rule applies;(2) the financial promotion rules apply as modified below;(3) COBS 7 (Insurance mediation) applies but only if the designated professional body of the firm does not have rules approved by the FCA under section 332(5) of the Act that implement articles 12 and 13 of the Insurance Mediation Directive and that
CONC 15.1.3GRP
The financial promotion rules in CONC 3 apply to firms'financial promotions concerning credit agreements secured on land, apart from the extent to which a financial promotion or communication concerns qualifying credit. CONC 3.3.1 R requires financial promotions to be clear fair and not misleading; firms should take particular care with respect to explaining the nature of the credit to be provided and the costs of borrowing. [Note: paragraph 3.2 of SCLG]
PERG 8.17.20GRP
4CONC 3 contains rules about financial promotions relating to credit-related regulated activity. CONC 3 does not apply, however, to the communication, or approval for communication, of a financial promotion to the extent it concerns qualifying credit. MCOB 3 applies to the communication or approval of a financial promotion of qualifying credit. This means that a financial promotion about credit will not usually be subject to both MCOB 3 and CONC 3 unless it is about secured and
CONC 3.10.2RRP
A firm must not communicate a solicited or unsolicited financial promotion that is not in writing, to a customer outside the firm's premises, unless the personcommunicating it:(1) only does so at an appropriate time of the day; and(2) identifies that person and the firm represented at the outset and makes clear the purpose of the communication.[Note: paragraphs 3.9d of CBG and 3.12b of DMG]
CREDS 10.1.3GRP

Module

Relevance to Credit Unions

The Principles for Businesses (PRIN)

The Principles for Businesses (PRIN) set out 3high-level requirements 3imposed by the FCA3. They provide a general statement of regulatory requirements. The Principles apply to all12credit unions. In applying the Principles to credit unions, the FCA3 will be mindful of proportionality. In practice, the implications are likely to vary according to the size and complexity 3of the credit union.

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Senior Management Arrangements, Systems and Controls (SYSC)

SYSC 1,3SYSC 4 to 10 and SYSC 213 apply to all credit unions in respect of the carrying on of their regulated activities and unregulated activities in a prudential context. SYSC 18 applies to all credit unions in respect of both their regulated activities and their unregulated activities3.

Threshold Conditions (COND)

In order to become authorised under the Act all firms must meet the threshold conditions. The threshold conditions must be met on a continuing basis by credit unions. Failure to meet one of the conditions is sufficient grounds for the exercise by the FCA3 of its powers.

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Statements of Principle and Code of Practice for Approved Persons (APER)

The purpose of the Statements of Principle contained in APER 2 is to provide guidance to approved persons in relation to the conduct expected of them in the performance of a controlled function. The Code of Practice for Approved Persons sets out descriptions of conduct which, in the opinion of the FCA3, do not comply with a Statement of Principle and, in the case of Statement of Principle 3, conduct which tends to show compliance within that statement.

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The Fit and Proper test for Approved Persons (FIT)

The purpose of FIT is to set out and describe the criteria that the FCA3 will consider when assessing the fitness and propriety of a person in respect of whom an application is being made for approval to undertake a controlled function under the approved persons regime. The criteria are also relevant in assessing the continuing fitness and propriety of persons who have already been approved.

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General Provisions (GEN)

GEN contains rules and guidance on general matters, including interpreting the Handbook, statutory status disclosure, the FCA's3 logo and insurance against financial penalties.

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Fees manual (FEES)

This manual sets out the fees applying to credit unions.

3Prudential sourcebook for Mortgage and Home Finance Firms, and Insurance Intermediaries (MIPRU)

MIPRU applies to any credit union carrying out insurance mediation activity or home finance mediation activity, or using these services. In particular, it sets out requirements for allocation of responsibility for the credit union’sinsurance mediation activity (MIPRU 2), for the use of home finance intermediaries (MIPRU 5) and for professional indemnity insurance (MIPRU 3).

Conduct of Business sourcebook (COBS)

A credit union which acts as a CTF provider or provides a cash-deposit ISA will need to be aware of the relevant requirements in COBS. COBS 4.6 (Past, simulated past and future performance), COBS 4.7.1 R (Direct offer financial promotions), COBS 4.10 (Systems and controls and approving and communicating financial promotions), COBS 13 (Preparing product information) and COBS 14 (Providing product information to clients) apply with respect to accepting deposits as set out in those provisions, COBS 4.1 and BCOBS.

3Insurance: Conduct of Business sourcebook (ICOBS)

ICOBS applies to any credit union carrying on non-investment insurance activities, such as arranging or advising on general insurance contracts to be taken out by members. But ICOBS does not apply to a credit union taking out an insurance policy for itself, such as a policy against default by members on their loans where the credit union is the beneficiary of the policy, since in this circumstance the credit union would not be acting as an insurance intermediary, but would itself be the customer. Credit unions are reminded that they are subject to the requirements of the appropriate legislation, including the Credit Unions Act 1979, relating to activities a credit union may carry on.

3Mortgages and Home Finance: Conduct of Business sourcebook (MCOB)

MCOB applies to any credit union that engages in any home finance activity. MCOB rules cover advising and selling standards, responsible lending (including affordability assessment), charges, and the fair treatment of customers in payment difficulties.

Banking: Conduct of Business sourcebook (BCOBS)

BCOBS sets out rules and guidance for credit unions on how they should conduct their business with their customers. In particular there are rules and guidance relating to communications with banking customers3and financial promotions (BCOBS 2), distance communications (BCOBS 3), information to be communicated to banking customers3(BCOBS 4), post sale requirements (BCOBS 5), and cancellation (BCOBS 6). 3The rules in BCOBS 3.1 that relate to distance contracts may apply 3to a credit union. This is because the Distance Marketing Directive3applies where there is "an organised distance sales or service-provision scheme run by the supplier" (Article 2(a)), i.e. if the credit union routinely sells any of its services by post, telephone, fax or the internet3.

Supervision manual (SUP)

The following provisions of SUP are relevant to credit unions: 13SUP 1A13 (The FCA’s 3 approach to supervision), SUP 2 (Information gathering by the FCA or PRA 3 on its own initiative), SUP 3.1 to SUP 3.8 (Auditors), SUP 5 (Skilled persons), SUP 6 (Applications to vary or cancel Part 4A12permission), SUP 7 (Individual requirements), SUP 8 (Waiver and modification of rules), SUP 9 (Individual guidance), 13SUP 10A and SUP 10B13 (Approved persons), SUP 11 (Controllers and Close links), SUP 15 (Notifications to the FCA or PRA 3) and SUP 16 (Reporting Requirements).

Credit unions are reminded that they are subject to the requirements of the Act and SUP 11 on close links, and are bound to notify the FCA3 of changes. It may be unlikely, in practice, that credit unions will develop such relationships. It is possible, however, that a person may acquire close links with a 3credit union3 within the meaning of the Act by reason of holding the prescribed proportion of deferred shares in the credit union.

In relation to SUP 16, credit unions are exempted from the requirement to submit annual reports of 3close links.

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3Consumer Credit sourcebook (CONC)

CONC contains rules that apply to firms carrying on credit-related regulated activities. PERG 2.7.19IG provides guidance on relevant exemptions. Most credit union lending is therefore outside the scope of CONC. However, subject to the constraints in the Credit Unions Act 1979 or the Credit Unions (Northern Ireland) Order 1985 (as relevant), credit unions may undertake credit-related regulated activities to which CONC does apply if the activity is carried out by way of business. This could include lending under a borrower-lender-supplier agreement, or debt adjusting or debt counselling where the credit union is not the lender. A credit union carrying on such activities should consider whether it requires permission to do so. Further information can be found on the FCA’s website.

Decision, Procedure and Penalties manual (DEPP)

DEPP is relevant to credit unions because it sets out:

(1) the FCA's12 decision-making procedure for giving statutory notices. These are warning notices, decision notices and supervisory notices (DEPP 1.2 to DEPP 5); and

(2) the FCA's12 policy with respect to the imposition and amount of penalties under the Act (see DEPP 6).

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Dispute Resolution: Complaints (DISP)

DISP sets out rules and guidance in relation to treating complainants fairly and the Financial Ombudsman Service.

Compensation (COMP)

COMP sets out rules relating to the scheme for compensating consumers when authorised firms are unable, or likely to be unable, to satisfy claims against them.12

The Enforcement Guide (EG)

The Enforcement Guide (EG) describes the FCA's12 approach to exercising the main enforcement powers given to it by the Act and by other legislation.2

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Financial crime: a guide for firms (FC)

FC provides guidance on steps that a firm can take to reduce the risk that it might be used to further financial crime.

CONC 4.1.5RRP
(1) Paragraphs (2) to (5) apply to CONC 4.1.3 R and CONC 4.1.4 R (rules on content of quotations).(2) “Quotation” means any document by which a person gives a customer information about the terms on which the person or a lender or owner is prepared to do business, but it does not include:(a) a communication which is also a financial promotion;(b) any document given to a customer under section 58 of the CCA (opportunity for withdrawal from prospective land mortgage);(c) any document