Related provisions for MCOB 11.6.21
41 - 60 of 377 items.
A firm may satisfy MCOB 5.4.10 R by drawing the customer's attention orally to the importance of reading and understanding the illustration, for example in a face-to-face meeting, or by referring to its importance in a covering letter or electronic communication or other written information that accompanies the illustration.
3MCOB 53 places no restrictions on the provision of information that is not specific to the amount the customer wants to borrow, for example, marketing literature including generic mortgage repayment tables or graphs illustrating the benefits of making a regular overpayment on a flexible mortgage. Such literature may, however, constitute a financial promotion2 and be subject to the provisions of MCOB 3 (Financial promotion).2
(1) 3In order to demonstrate compliance with MCOB 5.4.18AR (1), a firm may wish to consider, for example, doing one or more of the following: give the messages to the customer in a durable medium; build the requirements into the firm's training of staff, as evidenced by its training and compliance manuals; insert appropriate prompts into paper-based or automated sales systems; have procedures in place to monitor compliance by its staff with that rule. What is required in each
(1) 2Firms must provide advice in a durable medium, unless CONC 8.3.4AR applies. Where questions over the application of that exemption may arise, for example, in relation to advice given to a customer at an initial meeting or telephone call, the following considerations may be relevant:(a) if a firm never charges for advice and never enters into contracts with customers for debt solutions, CONC 8.3.4AR may remove the requirement to provide advice to the customer in a durable
(1) The information and advice referred to in CONC 8.3 should be provided in a manner which is clear fair and not misleading to comply with Principle 7 and CONC 3.3.1 R, and should be in plain and intelligible language in accordance with CONC 3.3.2 R. A firm should encourage a customer to read the information and allow sufficient time between providing the information and entering into the contract to enable the customer to seek independent advice if so desired. [Note: paragraphs
Firms are reminded that they must, under SYSC 6.1.1 R, establish, implement and maintain adequate policies and procedures sufficient to ensure compliance of the firm with the rules under this chapter. This should include, for example, establishing and maintaining policies and procedures concerning:(1) the frequency and method of the reconciliations the firm is required to carry out under this section; (2) the resolution of reconciliation discrepancies under this section; and(3)
In carrying out an internal client money reconciliation, a firm must use the values contained in its internal records and ledgers (for example, its cash book or other internal accounting records) rather than the values contained in the records it has obtained from banks and other third parties with whom it has placed client money (for example, bank statements).
2The following are indicators of whether action by the FCA or one of the other agencies is more appropriate. They are not listed in any particular order or ranked according to priority. No single feature of the case should be considered in isolation, but rather the whole case should be considered in the round.(a) 2 Tending towards action by the FCAWhere the suspected conduct in question gives rise to concerns regarding market confidence or protection of consumers of services regulated
2If the agencies identify that particular action by one party might prejudice an investigation or future proceedings by another, it is desirable for the parties concerned to discuss and decide what action should be taken and by whom. In reaching these decisions, they will bear in mind how the public interest is best served overall. The examples provided in App 2.1.9 above may also be used as indicators of where the overall balance of interest lies.
2The agencies will consider, as necessary, and keep under review whether an investigation has reached the point where it is appropriate to commence proceedings. Where agencies are deciding whether to institute criminal proceedings, they will have regard to the usual codes or guidance relevant to that decision. For example, agencies other than the PPS or COPFS will have regard to the Code for Crown Prosecutors (Note: Different guidance applies to the PPS and COPFS. All criminal
MCOB applies to regulated mortgage contracts entered into on or after 31 October 2004. A contract that was entered into before 31 October 2004, and that is subsequently varied on or after that date, will not be a regulated mortgage contract but may be a regulated credit agreement to which the CCA and CONC apply. If, however, a new contract is entered into on or after 31 October 2004, replacing the previous contract, this may be a regulated mortgage contract.4PERG 4.4.13G2 contains
(1) MCOB 1.6.4 R(2) means, for example, that if a firm discovered immediately after completion that a loan was a regulated mortgage contract, the firm would be required to comply with MCOB 7.4 (Disclosure at the start of the contract).(2) Although MCOB 1.6.4 R recognises that firms may become aware that a mortgage is a regulated mortgage contract at a late stage, the FCA expects this to be an extremely rare occurrence. It could arise, for example, if a firm has acted on the understanding,
Members will individually comply with this chapter if and only if all complaints by policyholders against members are dealt with under the Lloyd's complaints procedures. Accordingly, certain of the obligations under this chapter, for example the obligation to report on complaints received and the obligation to pay fees under the rules relating to the funding of the Financial Ombudsman Service (FEES 5), must be complied with by the Society on behalf of members. Managing agents
(1) A policy's main characteristics include its significant benefits, its significant exclusions and limitations, its duration and price information.(2) A significant exclusion or limitation is one that would tend to affect the decision of customers generally to buy. In determining what exclusions or limitations are significant, a firm should particularly consider the exclusions or limitations that relate to the significant features and benefits of a policy and factors which may
(1) This guidance applies to policies bought as secondary products to revolving credit agreements (such as store cards or credit cards).(2) Price information should be given in a way calculated to enable a typical customer to understand the typical cumulative cost of taking out the policy. This does not require oral disclosure where there is a sales dialogue with a customer. However, consistent with Principle 7, a firm should ensure that this element of price information is not
(1) When explaining the implications of a change, a firm should explain any changes to the benefits and significant or unusual exclusions arising from the change.(2) Firms will need to consider whether mid-term changes are compatible with the original policy, in particular whether it reserves the right to vary premiums, charges or other terms. Firms also need to ensure that any terms which reserve the right to make variations are not themselves unfair under the Unfair Terms Regulations
Examples of related expressions are:(1) "advice on investments" and "advise on investments", which should be interpreted by reference to "advising on investments";(2) "closely linked", which should be interpreted by reference to "close links";(3) "controls" and "controlled", which should be interpreted by reference to "control";19(4) "effect", as for example in "effect a life policy", which should be interpreted by reference to "effecting contracts of insurance"; and19(5) “employment”,
GEN 2.2.14 R means that, for example, electronic media may be used to make communications which are required by a provision of the Handbook to be "in writing", unless a contrary intention appears, or the use of electronic media would contravene some other requirement. GEN 2.2.14 R does not, however, affect any other legal requirement which may apply in relation to the form or manner of executing a document or agreement. 368
36Examples of rules being interpreted as cut back by GEN 2.2.23 R include the following:(1) [deleted]1212(2) SYSC 6.1.1 R requires a firm to maintain adequate policies and procedures to ensure compliance with its obligations under the regulatory system; SYSC 6.1.1 R should be interpreted:(a) as applied by the FCA in respect of a PRA-authorised person's compliance with regulatory obligations that are the responsibility of the FCA (for example, in respect of a bank maintaining policies
A person is an indirect holder of shares for the purpose of the applicable definition of shareholder to the extent that he is entitled to acquire, to dispose of, or to exercise voting rights in any of the following cases or a combination of them:
Case |
|
(a) |
voting rights held by a third party with whom that person has concluded an agreement, which obliges them to adopt, by concerted exercise of the voting rights they hold, a lasting common policy towards the management of the issuer in question; |
(b) |
voting rights held by a third party under an agreement concluded with that person providing for the temporary transfer for consideration of the voting rights in question; |
(c) |
voting rights attaching to shares which are lodged as collateral with that person provided that person controls the voting rights and declares its intention of exercising them; |
(d) |
voting rights attaching to shares in which that person has the life interest; |
(e) |
voting rights which are held, or may be exercised within the meaning of points (a) to (d) or, in cases (f) and (h) by a person1 undertaking investment management, or by a management company, by an undertaking controlled by that person; 1 |
(f) |
voting rights attaching to shares deposited with that person which the person can exercise at its discretion in the absence of specific instructions from the shareholders; |
(g) |
voting rights held by a third party in his own name on behalf of that person; |
(h) |
voting rights which that person may exercise as a proxy where that person can exercise the voting rights at his discretion in the absence of specific instructions from the shareholders. |
[Note: article 10 of the TD]
Cases (a) to (h) in DTR 5.2.1 R identify situations where a person may be able to control the manner in which voting rights are exercised and where, (taking account of any aggregation with other holdings) a notification to the issuer may need to be made. In the FCA's view:(1) Case (e) produces the result that it is always necessary for the parent undertaking of a controlled undertaking to aggregate its holding with any holding of the controlled undertaking (subject to the exemptions
A person falling within Cases (a) to (h) is an indirect holder of shares for the purpose of the definition of shareholder. These indirect holdings have to be aggregated, but also separately identified in a notification to the issuer. Apart from those identified in the Cases (a) to (h), the FCA does not expect any other significant category "indirect shareholder" to be identified. Cases (a) to (h) are also relevant in determining whether a person is an indirect holder of financial
In such cases the firm should pay to the complainant a sum equal to the total amount paid by the complainant in respect of the payment protection contract including historic interest where relevant (plus simple interest on that amount). If the complainant has received any rebate, for example if the customer cancelled a single premium payment protection contract before it ran full term and received a refund, the firm may deduct the value of this rebate from the amount otherwise
If a firm chooses to make this presumption, then it should do so fairly and for all relevant complainants in a relevant category of sale. It should not, for example, only use the approach for those complainants it views as being a lower underwriting risk or those complainants who have cancelled their policies.
The firm should, for the purposes of redressing the complaint, use the value of £9 per £100 of benefits payable as the monthly price of the alternative regular premium payment protection contract. For example, if the monthly repayment amount in relation to the loan only is to be £200, the price of the alternative regular premium payment protection contract will be £18.
A firm is reminded that when CASS 7.10.1 R applies it should treat client money in an appropriate manner so that, for example:(1) if it holds client money in a client bank account that account is held in the firm's name in accordance with CASS 7.13.13 R;(2) if it allows another person to hold client money this is effected under CASS 7.14; and(3) its internal client money reconciliation takes into account any client equity balance relating to its margined transaction requireme
When a firm undertakes a range of business for a professional client and has separate agreements for each type of business undertaken, the firm may treat client money held on behalf of the client differently for different types of business; for example, a firm may, under CASS 7.10.10 R or CASS 7.10.12 R, elect to segregate client money in connection with securities transactions and not segregate (by complying with CASS 7.10.10 R or CASS 7.10.12 R) money in connection with contingent
A trustee firm may wish to make an election under CASS 7.10.38 R if, for example, it acts for a number of distinct trusts which it wishes, or is required, to keep operationally separate. If a firm makes such an election then it should:(1) establish and maintain adequate internal systems and controls to effectively segregate client money held for one trust from client money held for another trust; and(2) conduct internal client money reconciliations as set out in CASS 7.16 and
2Examples of features of a regulated sale and rent agreement that a SRB agreement seller would reasonably need to know about (see MCOB 5.9.1R (1A)(m)) would include an arrangement under which the seller is to receive from the SRB agreement provider a refund of some agreed percentage of the discount (on the market value of the property) that was reflected in the sale price under the regulated sale and rent back agreement after the end of the agreed letting term. Should any restrictions
2What constitutes "materially altered" requires consideration of the facts of each individual case. For example, a change in the proposed purchase or valuation price of the property should normally be regarded as material, as would the introduction of an additional charge applying to the regulated sale and rent back agreement when it did not previously.
2If the firm has reasonable evidence that the contract is not a regulated sale and rent back agreement, for example where at least 40% of the property is not going to be occupied as a dwelling by the seller or his family, and has not provided the required pre-sale disclosures and the firm subsequently concludes that the contract does qualify as a regulated sale and rent back agreement, there is no requirement to provide separate pre-sale disclosures at the time the firm reaches
In the FCA's view, money payable to an introducer on his own account includes money legitimately due to him for services rendered to the borrower, whether in connection with the introduction or otherwise. It also includes sums payable to an introducer (for example, a housebuilder) by a buyer in connection with a transfer of property. For example, article 33A allows a housebuilder to receive the purchase price on a property that he sells to a borrower, whom he previously introduced
In the FCA's view, details of fees or commission referred to in PERG 4.5.14G (2) does not require an introducer to provide an actual sum to the borrower, where it is not possible to calculate the full amount due prior to the introduction. This may arise in cases where the fee or commission is a percentage of the eventual loan taken out and the amount of the required loan is not known at the time of the introduction. In these cases, it would be sufficient for the introducer to
In the FCA's view, the information condition in PERG 4.5.14G (3) requires the introducer to indicate to the borrower any other advantages accruing to him as a result of ongoing arrangements with N relating to the introduction of borrowers. This may include, for example, indirect benefits such as office space, travel expenses, subscription fees and this and other relevant information may be provided on a standard form basis to the borrower, as appropriate.
3The provisions in this sourcebook that apply to home reversion plans should be read in a purposive way. This means that firms should substitute equivalent home reversion terminology for lifetime mortgage terminology, where appropriate. Examples of terms and expressions that must be replaced 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
Given that the APR is presented as a percentage, and must be rounded to one decimal place in accordance with MCOB 10 (Annual Percentage Rate), firms should note that the tolerance allowed for the APR in MCOB 9.3.6 R(1)(b) means that, for example, where the actual APR is 5.0%, the quoted APR must be no lower than 4.9%, or where the actual APR is 16.0%, the quoted APR must be no lower than 15.9%.
An offer document may not always exactly match the illustration provided before application even when the equity release3 requirements have not changed. For example, where a fixed rate has a defined end date, the total amount payable may be different because the number of payments at the fixed rate has reduced, or the estimated amount of interest to be charged has changed, assuming a later date at which the lifetime mortgage3will start.33
The level of information required will vary according to matters such as:(1) the knowledge, experience and ability of a typical customer for the policy;(2) the policy terms, including its main benefits, exclusions, limitations, conditions and its duration;(3) the policy's overall complexity;(4) whether the policy is bought in connection with other goods and services;(5) distance communication information requirements (for example, under the distance communication rules less information
In determining what is “in good time”, a firm should consider the importance of the information to the customer's decision-making process and the point at which the information may be most useful. Distance communication timing requirements are also relevant (for example, the distance communication rules enable certain information to be provided post-conclusion in telephone and certain other sales (see ICOBS 3.1.14 R and ICOBS 3.1.15 R)).
(1) In assessing whether a penalty would cause an individual serious financial hardship, the FCA3 will consider the individual’s ability to pay the penalty over a reasonable period (normally no greater than three years). The FCA's3 starting point is that an individual will suffer serious financial hardship only if during that period his net annual income will fall below £14,000 and his capital will fall below £16,000 as a result of payment of the penalty. Unless the FCA3 believes
(1) The FCA3 will consider reducing the amount of a penalty if a firm will suffer serious financial hardship as a result of having to pay the entire penalty. In deciding whether it is appropriate to reduce the penalty, the FCA3 will take into consideration the firm’s financial circumstances, including whether the penalty would render the firm insolvent or threaten the firm’s solvency. The FCA3 will also take into account its statutory objectives3, for example in situations where
Where the FCA3 considers that, following commencement of an FCA3 investigation, an individual or firm has reduced their solvency in order to reduce the amount of any disgorgement or financial penalty payable, for example by transferring assets to third parties, the FCA3 will normally take account of those assets when determining whether the individual or firm would suffer serious financial hardship as a result of the disgorgement and financial penalty.333
(1) A person with overall responsibility for a matter will either be a member of the governing body or will report directly to the governing body for that matter.(2) For example, a firm appoints A to be head of sales. A is not on the governing body. A reports to an executive director (B) and B reports to the governing body about the sales function. In this example B, rather than A, has overall responsibility for sales.
(1) A person who reports to another, or is subject to oversight by another, may still have overall responsibility for a function.(2) For example, a head of compliance may report direct to the governing body but be subject to performance appraisal by the chief executive. In this example, the head of compliance will still have overall responsibility for compliance.(3) If a person (A):(a) reports directly to the firm'sgoverning body about a particular matter; but(b) is not a member
The FCA would not consider it unusual if a person who has overall responsibility for a particular function was not a member of the governing body. For example, in some firms, the head of compliance reports directly to the governing body even though the head compliance is not a member of the governing body.
(1) Although the norm should be for a firm to have a single individual performing each FCA-prescribed senior management responsibility or function allocated under SYSC 4.7.8R (Allocation of overall responsibility for a firm’s activities, business areas and management functions), there may be circumstances in which responsibilities can be divided or shared (see (2)).(2) A firm should only divide or share a responsibility where this is appropriate and can be justified.(3) For example,
The CFEB levy is calculated as follows:(1) identify each of the activity groups set out in Part 1 of FEES 7 Annex 1 that apply to the business of the firm for the relevant period (for this purpose, the activity groups are defined in accordance with Part 1 of and the activity groups under are defined in accordance with Part 1 of that Annex);FEES 4 Annex 1A);66(2) for each of those activity groups, calculate the amount payable in the way set out in FEES 7.2.3 R;(3) add the amounts
The amount payable by a firm with respect to a particular activity group is calculated as follows:(1) calculate the size of the firm's tariff base for that activity group using the tariff base calculations in Part 3 of FEES 4 Annex 1A6 and Part 3 of FEES 4 Annex 111 and the valuation date requirements in Part 5 of FEES 4 Annex 1A6 and Part 3 of FEES 4 Annex 11;1(2) use the figure in (1) to calculate which of the bands set out in column 2 of the table in Part 1 of FEES 7 Annex
In some cases, a FEES 4rule incorporated into FEES 7 in the manner set out in FEES 7.2.7 G will refer to another rule in FEES 4 that has not been individually incorporated into FEES 7. Such a reference should be read as being to the corresponding provision in FEES 7. The main examples are set out in FEES 7.2.12 G.
The following is a non-exhaustive list of examples of conduct that would be in breach of rule SC1.(1) Failing to take reasonable steps to apportion responsibilities for all areas of the business under the approved person's control.(2) Failing to take reasonable steps to apportion responsibilities clearly among those to whom responsibilities have been delegated, which includes establishing confusing or uncertain:(a) reporting lines; or(b) authorisation levels; or(c) job descriptions
The following is a non-exhaustive list of examples of conduct that would be in breach of rule SC2.(1) Failing to take reasonable steps to implement (either personally or through a compliance department or other departments) adequate and appropriate systems of control to comply with the relevant requirements and standards of the regulatory system for the activities of the firm.(2) Failing to take reasonable steps to monitor (either personally or through a compliance department
A senior conduct rules staff member should have reasonable grounds for believing that the delegate has the competence, knowledge, skill and time to deal with the issue. For instance, if the compliance department only has sufficient resources to deal with day-to-day issues, it would be unreasonable to delegate to it the resolution of a complex or unusual issue without ensuring it had sufficient capacity to deal with the matter adequately.
The following is a non-exhaustive list of examples of conduct that would be in breach of rule SC3.(1) Failing to take reasonable steps to maintain an appropriate level of understanding about an issue or part of the business that the senior conduct rules staff member has delegated to an individual(s) (whether in-house or outside contractors) including:(a) disregarding an issue or part of the business once it has been delegated;(b) failing to require adequate reports once the resolution
A designated client fund account may be used for a client only where that client has consented to the use of that account and all other designated client fund accounts which may be pooled with it. For example, a client who consents to the use of bank A and bank B should have his money held in a different designated client fund account at bank B from a client who has consented to the use of banks B and C. If a firm deposits client money into a designated client fund account then,
If a firm is unable to identify money that it has received as either client money or its own money under CASS 7.13.37 R, it should consider whether it would be appropriate to return the money to the person who sent it or to the source from where it was received (3for example, the banking institution).