Related provisions for MCOB 6.8.5A

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ICOBS 3.1.2GRP
Guidance on expressions derived from the Distance Marketing Directive and on the Directive's application in the context of insurance mediation activity can be found in ICOBS 3 Annex 1 G.
ICOBS 3.1.3RRP
A firm must provide a consumer with the distance marketing information (ICOBS 3 Annex 2 R) in good time before conclusion of a distance contract.[Note: article 3(1) of the Distance Marketing Directive]
ICOBS 3.1.5RRP
A firm must ensure that the distance marketing information, the commercial purpose of which must be made clear, is provided in a clear and comprehensible manner in any way appropriate to the means of distance communication used, with due regard, in particular, to the principles of good faith in commercial transactions, and the legal principles governing the protection of those who are unable to give their consent, such as minors.[Note: article 3(2) of the Distance Marketing D
ICOBS 3.1.6RRP
When a firm makes a voice telephony communication to a consumer, it must make its identity and the purpose of its call explicitly clear at the beginning of the conversation.[Note: article 3(3)(a) of the Distance Marketing Directive]
ICOBS 3.1.7RRP
A firm must ensure that the information on contractual obligations to be communicated to a consumer during the pre-contractual phase is in conformity with the contractual obligations which would result from the law presumed to be applicable to the distance contract if that contract is concluded.[Note: article 3(4) of the Distance Marketing Directive]
ICOBS 3.1.8RRP
A firm must communicate to the consumer all the contractual terms and conditions and the information referred to in the distance marketing disclosure rules in writing or another durable medium available and accessible to the consumer in good time before conclusion of any distance contract.[Note: article 5(1) of the Distance Marketing Directive]
ICOBS 3.1.10RRP
The performance of the distance contract may only begin after the consumer has given his approval.[Note: article 7(1) of the Distance Marketing Directive]
ICOBS 3.1.11RRP
This section does not apply to a distance contract to act as insurance intermediary, if the distance contract is concluded merely as a stage in the provision of another service by the firm or another person.[Note: recital 19 to the Distance Marketing Directive]
ICOBS 3.1.12RRP
In the case of a distance contract comprising an initial service agreement, followed by successive operations or a series of separate operations of the same nature performed over time, the rules in this section only apply to the initial agreement.[Note: article 1(2) of the Distance Marketing Directive]
ICOBS 3.1.13RRP
If there is no initial service agreement but the successive operations or separate operations of the same nature performed over time are performed between the same contractual parties, the distance marketing disclosure rules will only apply:(1) when the first operation is performed; and(2) if no operation of the same nature is performed for more than a year, when the next operation is performed (the next operation being deemed to be the first in a new series of operations).[Note:
ICOBS 3.1.14RRP
(1) In the case of a voice telephony communication, and subject to the explicit consent of the consumer, only the abbreviated distance marketing information (ICOBS 3 Annex 3 R) needs to be provided during that communication.(2) However, unless another exemption applies (such as the exemption for means of distance communication not enabling disclosure) a firm must still provide the distance marketing information (ICOBS 3 Annex 2 R) in writing or another durable medium available
ICOBS 3.1.15RRP
A firm may provide the distance marketing information (ICOBS 3 Annex 2 R) and the contractual terms and conditions in writing or another durable medium immediately after the conclusion of a distance contract, if the contract has been concluded at a consumer's request using a means of distance communication that does not enable the provision of that information in that form in good time before conclusion of any distance contract.[Note: article 5(2) of the Distance Marketing Di
ICOBS 3.1.16RRP
At any time during the contractual relationship the consumer is entitled, at his request, to receive the contractual terms and conditions on paper. The consumer is also entitled to change the means of distance communication used unless this is incompatible with the contract concluded or the nature of the service provided.[Note: article 5(3) of the Distance Marketing Directive]
ICOBS 3.1.17RRP
(1) A firm must not enforce, or seek to enforce, any obligations under a distance contract against a consumer, in the event of an unsolicited supply of services, the absence of reply not constituting consent.(2) This rule does not apply to the tacit renewal of a distance contract.[Note: article 9 of the Distance Marketing Directive]
ICOBS 3.1.18RRP
If a consumer purports to waive any of the consumer's rights created or implied by the rules in this section, a firm must not accept that waiver, nor seek to rely on or enforce it against the consumer.[Note: article 12 of the Distance Marketing Directive]
ICOBS 3.1.19RRP
If a firm proposes to enter into a distance contract with a consumer that will be governed by the law of a country outside the EEA, the firm must ensure that the consumer will not lose the protection created by the rules in this section if the distance contract has a close link with the territory of one or more EEA States.[Note: articles 12 and 16 of the Distance Marketing Directive]
COBS 5.1.2RRP
A firm must ensure that the distance marketing information, the commercial purpose of which must be made clear, is provided in a clear and comprehensible manner in any way appropriate to the means of distance communication used, with due regard, in particular, to the principles of good faith in commercial transactions, and the legal principles governing the protection of those who are unable to give their consent, such as minors. [Note: article 3(2) of the Distance Marketing
COBS 5.1.3RRP
When a firm makes a voice telephony communication to a consumer, it must make its identity and the purpose of its call explicitly clear at the beginning of the conversation. [Note: article 3(3)(a) of the Distance Marketing Directive]
COBS 5.1.4RRP
A firm must ensure that information on contractual obligations to be communicated to a consumer during the pre-contractual phase is in conformity with the contractual obligations which would result from the law presumed to be applicable to the distance contract if that contract is concluded. [Note: article 3(4) of the Distance Marketing Directive]
COBS 5.1.5RRP
A firm must communicate to the consumer all the contractual terms and conditions and the information referred to in the distance marketing disclosure rules (COBS 5.1.1 R to COBS 5.1.4 R) on a durable medium available and accessible to the consumer in good time before the consumer is bound by any distance contract or offer. [Note: article 5(1) of the Distance Marketing Directive]
COBS 5.1.7RRP
This section does not apply to a distance contract to deal as agent, advise or arrange, if the distance contract is concluded merely as a stage in the provision of another service by the firm or another person. [Note: recital 19 to the Distance Marketing Directive]
COBS 5.1.8RRP
In the case of a distance contract comprising an initial service agreement, followed by successive operations or a series of separate operations of the same nature performed over time, the rules in this section only apply to the initial agreement. [Note: article 1(2) of the Distance Marketing Directive]
COBS 5.1.9RRP
If there is no initial service agreement but the successive operations or separate operations of the same nature performed over time are performed between the same contractual parties, the distance marketing disclosure rules (COBS 5.1.1 R to COBS 5.1.4 R) will only apply: (1) when the first operation is performed; and(2) if no operation of the same nature is performed for more than a year, when the next operation is performed (the next operation being deemed the first in a new
COBS 5.1.12RRP
In the case of a voice telephony communication, and subject to the explicit consent of the consumer, only the abbreviated distance marketing information (COBS 5 Annex 2R ) needs to be provided during that communication. However, a firm must still provide the distance marketing information (COBS 5 Annex 1R ) on a durable medium available and accessible to the consumer in good time before the consumer is bound by any distance contract or offer, unless another exception applies.
COBS 5.1.13RRP
A firm may provide the distance marketing information (COBS 5 Annex 1R ) and the contractual terms and conditions in a durable medium immediately after the conclusion of a distance contract, if the contract has been concluded at a consumer's request using a means of distance communication that does not enable the provision of that information in that form in good time before the consumer is bound by any distance contract or offer. [Note: article 5(2) of the Distance Marketing
COBS 5.1.13ARRP
4Where a distance contract is also a contract for payment services to which the Payment Services Regulations apply, a firm is required to provide to the consumer only the information specified in rows 7 to 12, 15, 16 and 20 of COBS 5 Annex 1 R. [Note: article 4(5) of the Distance Marketing Directive]
COBS 5.1.14RRP
If, at any time during the contractual relationship, a consumer that is a party to a distance contract asks a firm:(1) for a paper copy of the terms and conditions of that contract; or(2) to change the means of distance communication used;the firm must provide that paper copy or change the means of distance communication used, unless (in the latter case) that would be incompatible with the contract or the nature of the service provided. [Note: article 5(3) of the Distance Marketing
COBS 5.1.15RRP
(1) A firm must not enforce, or seek to enforce, any obligations under a distance contract against a consumer, in the event of an unsolicited supply of services, the absence of reply not constituting consent.(2) This rule does not apply to the tacit renewal of a distance contract. [Note: article 9 of the Distance Marketing Directive]
COBS 5.1.16RRP
If a consumer purports to waive any of the consumer's rights created or implied by the rules in this section, a firm must not accept that waiver, nor seek to rely on or enforce it against the consumer. [Note: article 12 of the Distance Marketing Directive]
COBS 5.1.17RRP
If a firm proposes to enter into a distance contract with a consumer that will be governed by the law of a country outside the EEA, the firm must ensure that the consumer will not lose the protection created by the rules in this section if the distance contract has a close link with the territory of one or more EEA States. [Note: articles 12 and 16 of the Distance Marketing Directive]
CONC 2.7.2RRP
(1) Subject to (2), (3) and (4), a firm must provide a consumer with the distance marketing information (CONC 2 Annex 1R) in good time before the consumer is bound by a distance contract or offer.[Note: regulation 7(1) of SI 2004/2095][Note: articles 3(1) and 4(5) of the Distance Marketing Directive](2) Where a distance contract is also a contract for payment services to which the Payment Services Regulations apply, a firm is required to provide to the consumer only the information
CONC 2.7.3RRP
A firm must ensure that the distance marketing information, the commercial purpose of which must be made clear, is provided in a clear and comprehensible manner in a way appropriate to the means of distance communication used with due regard, in particular, to the principles of good faith in commercial transactions and the legal principles governing the protection of those who are unable to give their consent.[Note: regulation 7(2) and (3) of SI 2004/2095][Note: article 3(2) of
CONC 2.7.4RRP
When a firm makes a voice telephony communication to a consumer, it must make its identity and the purposes of its call explicitly clear at the beginning of the conversation. [Note: regulation 7(4) of SI 2004/2095][Note: article 3(3)(a) of the Distance Marketing Directive]
CONC 2.7.5RRP
A firm must ensure that information on contractual obligations to be communicated to a consumer during the pre-contractual phase accurately reflects the contractual obligations which would result from the law presumed to be applicable to the distance contract if that contract is concluded.[Note: regulation 7(5) of SI 2004/2095][Note: article 3(4) of the Distance Marketing Directive]
CONC 2.7.6RRP
A firm must communicate to the consumer all the contractual terms and conditions and the information referred to in the distance marketing disclosure rules (CONC 2.7.2 R to CONC 2.7.5 R) in a durable medium1. That information must be made available and accessible to the consumer in good time before the consumer is bound by any distance contract or offer.1[Note: regulation 8(1) of SI 2004/2095][Note: articles 4(5) and 5(1) of the Distance Marketing Directive]
CONC 2.7.7GRP
(1) Activities in relation to a consumer hire agreement are not financial services within the meaning of the Distance Marketing Directive and do not fall within CONC 2.7. Instead such agreements fall within the Consumer Protection (Distance Selling) Regulations 2000 (SI 2000/2334) if they were made before 13 June 2014, or the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (SI 2013/3134) if they were made on or after that date2.(2) A firm
CONC 2.7.8RRP
The performance of the distance contract may only begin after the consumer has given approval.[Note: article 7(1) of the Distance Marketing Directive]
CONC 2.7.9RRP
In the case of a distance contract comprising an initial service agreement, followed by successive operations or a series of separate operations of the same nature performed over time, the rules in this chapter only apply to the initial agreement.[Note: regulation 5(1) of SI 2004/2095][Note: article 1(2) of the Distance Marketing Directive]
CONC 2.7.10RRP
(1) If there is no initial service agreement but the successive or separate operations of the same nature performed over time are performed between the same contractual parties, the distance marketing disclosure rules (CONC 2.7.2 R to CONC 2.7.5 R) will only apply:(a) when the first operation is performed; and(b) if no operation of the same nature is performed for more than a year, when the next operation is performed (the next operation being deemed the first in a new series
CONC 2.7.11RRP
In the case of voice telephony communication, and subject to the explicit consent of the consumer, only the abbreviated distance marketing information (CONC 2 Annex 2R) needs to be provided during that communication. However, unless another exception applies (such as the exemption for means of distance communication not enabling disclosure), a firm must still provide the distance marketing information (CONC 2 Annex 1R) in a durable medium that is available and accessible to the
CONC 2.7.12RRP
A firm may provide the distance marketing information (CONC 2 Annex 1R) and the contractual terms and conditions in a durable medium immediately after the conclusion of a distance contract, if the contract has been concluded at a consumer's request using a means of distance communication that does not enable the provision of that information in that form in good time before the consumer is bound by any distance contract or offer.[Note: article 5(2) of the Distance Marketing
CONC 2.7.14RRP
At any time during the contractual relationship, the consumer is entitled, at request, to receive the contractual terms and conditions on paper. The consumer is also entitled to change the means of distance communication used unless this is incompatible with the contract concluded or the nature of the service provided.[Note: regulation 8(2) and (4) of SI 2004/2095][Note: article 5(3) of the Distance Marketing Directive]
CONC 2.7.15RRP
(1) A firm must not enforce, or seek to enforce, any obligations under a distance contract against a consumer in the event of an unsolicited supply of services. The absence of a reply does not constitute consent.(2) This rule does not apply to the tacit renewal of a distance contract.[Note: regulation 15 of SI 2004/2095][Note: article 9 of the Distance Marketing Directive]
CONC 2.7.16RRP
If a consumer purports to waive any of the consumer's rights created or implied by the rules in this section, a firm must not accept that waiver, nor seek to rely on or enforce it against the consumer.[Note: article 12 of the Distance Marketing Directive]
CONC 2.7.17RRP
If a firm proposes to enter into a distance contract with a consumer that will be governed by the law of a country outside the EEA, the firm must ensure that the consumer will not lose the protection created by the rules in this section if the distance contract has a close link with the territory of one or more EEA States.[Note: regulation 16(3) of SI 2004/2095][Note: articles 12 and 16 of the Distance Marketing Directive]
ICOBS 7.1.1RRP
1A consumer has a right to cancel, without penalty and without giving any reason, within:(1) 30 days for a contract of insurance which is, or has elements of, a pure protection contract or payment protection contract; or(2) 14 days for any other contract of insurance or distance contract.[Note: article 6(1) of the Distance Marketing Directive in relation to a distance contract and article 186 of the Solvency II Directive2 in relation to a pure protection contract] 2
ICOBS 7.1.3RRP
The right to cancel does not apply to:(1) a travel and baggage policy or similar short-term policy of less than one month's duration; (2) a policy the performance of which has been fully completed by both parties at the consumer's express request before the consumer exercises his right to cancel;(3) a pure protection contract of six months’ duration or less which is not a distance contract;(4) a pure protection contract effected by the trustees of an occupational pension scheme,
ICOBS 7.1.5RRP
The cancellation period begins either:(1) from the day of the conclusion of the contract, except in respect of a pure protection contract where the time limit begins when the customer is informed that the contract has been concluded; or(2) from the day on which the consumer receives the contractual terms and conditions and any other pre-contractual information required under this sourcebook, if that is later than the date referred to above.[Note: article 186(1) of the Solvency
ICOBS 7.1.6RRP
If a consumer exercises the right to cancel he must, before the expiry of the relevant deadline, notify this following the practical instructions given to him. The deadline shall be deemed to have been observed if the notification, if on paper or another durable medium, is dispatched before the deadline expires.[Note: article 6(1) and (6) of the Distance Marketing Directive]
ICOBS 7.2.2RRP
(1) When a consumer exercises the right to cancel he may only be required to pay, without any undue delay, for the service actually provided by the firm in accordance with the contract.(2) The amount payable must not:(a) exceed an amount which is in proportion to the extent of the service already provided in comparison with the full coverage of the contract; and(b) in any case be such that it could be construed as a penalty.(3) A firm must not require a consumer to pay any amount:(a)
ICOBS 7.2.6RRP
(1) A firm must, without any undue delay and no later than within 30 days, return to a consumer any sums it has received from him in accordance with the contract, except as specified in this section.(2) This period shall begin from the day on which the firm receives the notification of cancellation.[Note: article 7(4) of the Distance Marketing Directive]
ICOBS 7.2.7RRP
(1) A firm is entitled to receive from a consumer any sums and/or property he has received from the firm without any undue delay and no later than within 30 days.(2) This period shall begin from the day on which the consumer dispatches the notification of cancellation.[Note: article 7(5) of the Distance Marketing Directive]
ICOBS 7.2.10GRP
A consumer's notice to cancel a distance contract may also operate to cancel any attached contract which is also a distance financial services contract. This is unless the consumer gives notice that cancellation of the contract is not to operate to cancel the attached contract. (See the Distance Marketing Regulations.) Where relevant, this should be disclosed to the consumer along with other information on cancellation.
CONC 11.1.1RRP
Except as provided for in CONC 11.1.2 R or where PROF 5.4.1 R (1) or PROF 5.4.1 R (2) applies, a consumer has a right to cancel a distance contract without penalty and without giving any reason, within 14 calendar days where that contract is:(1) a credit agreement;(2) an agreement between a consumer and a firm the subject matter of which comprises or relates to credit broking,1debt counselling, debt adjusting, providing credit information services or providing credit references,
CONC 11.1.5RRP
The cancellation period begins:(1) either from the day the distance contract is made; or(2) from the day on which the consumer receives the contractual terms and conditions of the service and any other pre-contractual information required, as the case may be, under CONC 2.7.6 R or under CONC 2.7.12 R, if that is later than the date referred to in (1) above.[Note: article 6(1) of the Distance Marketing Directive in relation to distance contracts]
CONC 11.1.7RRP
If a consumer exercises the right to cancel the consumer must, before the expiry of the cancellation period, notify this following the practical instructions given to him. The deadline shall be deemed to have been observed if the notification, if in a durable medium available and accessible to the recipient, is dispatched before the cancellation period expires.[Note: article 6(6) of the Distance Marketing Directive for distance contracts]
CONC 11.1.11RRP
(1) When a consumer exercises the right to cancel the consumer may only be required to pay, without any undue delay, for the service actually provided by the firm in accordance with the contract. The amount payable must not:(a) exceed an amount which is in proportion to the extent of the service already provided in comparison with the full coverage of the contract;(b) in any case be such that it could be construed as a penalty.[Note: article 7(1), (2) and (3) of the Distance Marketing
CONC 11.1.12RRP
The firm must, without undue delay and within 30 calendar days, return to the consumer any sums it has received from the consumer except for any amount that the consumer may be required to pay under CONC 11.1.11 R. This period begins from the day on which the firm receives the notification of cancellation.[Note: article 7(1), (2) and (3) of the Distance Marketing Directive in relation to distance contracts]
CONC 11.1.13RRP
The firm is entitled to receive from the consumer any sums or property the consumer has received from the firm without any undue delay and no later than within 30 calendar days. This period begins from the day on which the consumer dispatches the notification of cancellation.[Note: article 7(5) of the Distance Marketing Directive in relation to distance contracts]
COBS 15.4.2RRP
(1) This rule applies in relation to a distance contract that is not a life policy, personal pension scheme, cash deposit ISA or CTF.(2) When the consumer exercises his right to cancel he may be required to pay, without any undue delay, for the service actually provided by the firm in accordance with the contract. The performance of the contract may only begin after the consumer has given his approval. The amount payable must not:(a) exceed an amount which is in proportion to
COBS 15.4.4RRP
The firm must, without any undue delay and no later than within 30 calendar days, return to the consumer any sums it has received from him in accordance with the contract2, except for any amount that the consumer may be required to pay under this section. This period shall begin from the day on which the firm receives the notification of cancellation.2 [Note: article 7(4) of the Distance Marketing Directive]
COBS 15.4.5RRP
The firm is entitled to receive from the consumer any sums and/or property he has received from the firm without any undue delay and no later than within 30 calendar days. This period shall begin from the day on which the consumer dispatches the notification of cancellation. [Note: article 7(5) of the Distance Marketing Directive]
COBS 15.3.1RRP
If a consumer exercises his right to cancel he must, before the expiry of the relevant deadline, notify this following the practical instructions given to him. The deadline shall be deemed to have been observed if the notification, if in a durable medium available and accessible to the recipient, is dispatched before the deadline expires. [Note: article 6 (6) of the Distance Marketing Directive]
COBS 15.3.2RRP
A consumer need not give any reason for exercising his right to cancel. [Note: article 6(1) of the Distance Marketing Directive]
ICOBS 3.2.8RRP
The requirements relating to the placing and receipt of orders do not apply to contracts concluded exclusively by exchange of e-mail or by equivalent individual communications.[Note: article 10(4) and 11(3) of the E-Commerce Directive]
COBS 15.2.1RRP

A consumer has a right to cancel any of the following contracts with a firm:

Cancellable contract

Cancellation period

Supplementary provisions

Life and pensions:

• a life policy (including a pension annuity, a pension policy or within a wrapper)

• a contract to join a personal pension scheme or a stakeholder pension scheme

• a pension contract

• a contract for a pension transfer

• a contract to vary an existing personal pension scheme or stakeholder pension scheme by exercising, for the first time, an option to make income withdrawals

,

30 calendar days

For a life policy effected when opening or transferring a wrapper, the 30 calendar day right to cancel applies to the entire arrangement

For a contract to buy a unit in a regulated collective investment scheme within a pension wrapper, the cancellation right for 'non-life/pensions (advised but not at a distance)' below may apply

Exemptions may apply (see COBS 15 Annex 1 )

Cash deposit ISAs:

• a contract for a cash deposit ISA

14 calendar days

Exemptions may apply (see COBS 15 Annex 1 )

Non-life/pensions (advised but not at a distance): a non-distance contract ...

• to buy a unit in a regulated collective investment scheme (including within a wrapper or pension wrapper)

• to open or transfer a child trust fund (CTF)

• to open or transfer an ISA

• for an Enterprise Investment Scheme

2

14 calendar days

These rights arise only following a personal recommendation of the contract (by the firm or any other person).2

For a unit bought when opening or transferring a wrapper or pension wrapper, the 14 calendar day right to cancel applies to the entire arrangement.2

Exemptions may apply (see COBS 15 Annex 1 ).2

Non-life/pensions (at a distance): a distance contract, relating to ...

• accepting deposits

• designated investment business

• issuing electronic money3

14 calendar days

Exemptions may apply (see COBS 15 Annex 1 )

[Note: article186 of the Solvency II Directive and5 article 6(1) of the Distance Marketing Directive]

5
COBS 15.2.3RRP
The cancellation period begins:(1) either from the day of the conclusion of the contract, except in respect of contracts relating to life policies where the time limit will begin from the time when the consumer is informed that the contract has been concluded; or(2) from the day on which the consumer receives the contractual terms and conditions and any other pre-contractual information required under this sourcebook, if that is later than the date referred to above. [Note: article186
MCOB 1.3.4RRP
(1) The rules in (2) do not apply to a firm with respect to a regulated mortgage activity or a home purchase activity2 exclusively concerning a distance contract if the following conditions are satisfied:2(a) the firm carries on the activity from an establishment maintained by the firm in an EEA State other than the United Kingdom; and(b) either the EEA State:(i) has implemented the Distance Marketing Directive3; or3(ii) has obligations in its domestic law corresponding to those
MCOB 1.3.5GRP
Parts of MCOB relate to distance contracts (or distance mortgage mediation contracts and distance home purchase mediation contracts2) with consumers3. These expressions are derived from the Distance Marketing Directive, and the following paragraphs provide some guidance to firms on their meaning:3(1) consumer3The Distance Marketing Directive applies for distance contracts with 'any natural person who is acting for purposes which are outside his trade, business or profession',
COBS 5.2.9RRP
The requirements relating to the placing and receipt of orders (COBS 5.2.6 R) do not apply to contracts concluded exclusively by exchange of e-mail or by equivalent individual communications. [Note: article 10(4) and 11(3) of the E-Commerce Directive]
MCOB 4.2.1GRP
(1) This chapter amplifies Principle 6 (Customers' interests), Principle 7 (Communications with clients) and Principle 9 (Customers: relationships of trust). 1(2) The purpose of this chapter is to ensure that:(a) customers are adequately informed about the range2 of home finance transactions available from firms and the basis of their remuneration;21212(b) where advice is given, it is suitable for the customer.2(c) 2the firm provides advice whenever it makes a sale during which
MCOB 8.2.2GRP
(1) 2This chapter amplifies Principle 6 (Customers' interests), Principle 7 (Communications with clients) and Principle 9 (Customers: relationships of trust). (2) The purpose of this chapter is to ensure that: (a) customers are adequately informed about the nature of the service they may receive from a firm in relation to equity release transactions. In particular firms need to make clear to customers the range of equity release transactions available from them and the basis of
EG 19.11.1RP
1These Regulations give effect to the Distance Marketing Directive.24 Under the Regulations, the FCA can enforce breaches of the Regulations concerning “specified contracts”. Specified contracts are certain contracts for the provision of financial services which are made at a distance and do not require the simultaneous physical presence of the parties to the contract. 24 Directive 2002/65/EC
CONC 2.10.20GRP
Where a firm understands, or reasonably suspects, a customer has or may have a mental capacity limitation the firm should take particular care that the customer is not provided with credit which the firm knows, or reasonably believes, to be unsuitable to the customer's needs, even where the credit would be affordable.[Note: paragraph 4.43 of MCG]
EG 19.13.1RP
1The FCA is a competent authority under the CPC Regulation, which aims to encourage and facilitate co-operation between competent authorities across the EU in consumer protection matters. The FCA is a competent authority for the purposes of specified EU consumer protection laws27 in the context of the regulated activities of authorised firms and of breaches by UK firms concerning “specified contracts” as defined in the Financial Services (Distance
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 4.5 (Management responsibilities maps for relevant authorised persons), SYSC 4.7 (Senior management responsibilities for relevant authorised persons: allocation of responsibilities), SYSC 4.9 (Handover procedures and material), SYSC 5.2 (Certification regime) and SYSC 18 apply3 to all credit unions in respect of both their regulated activities and their unregulated activities3.

3Code of Conduct (COCON)

This contains rules and guidance that are directly applicable to a credit union’sSMF managers, certification employees and (from 2017) other conduct rules staff. There is also guidance for credit unions on giving their staff training about COCON.

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.

121212

3

3

12312

The Fit and Proper test for Approved Persons (FIT)

The purpose of FIT is to set out and describe the criteria that a firm should3 consider when assessing the fitness and propriety of a person (1)3 in respect of whom an application is being made for approval to undertake a controlled function under the approved persons regime, (2)3 who has already been approved, (3) who is a certification employee or (4) whom a firm is considering appointing to be a certification employee3.

It also sets out and describes criteria that the FCA will consider when assessing the fitness and propriety of a candidate for a controlled function position and that it may consider when assessing the continuing fitness and propriety of approved persons.3

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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.

12

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. A credit union that communicates with clients, including in a financial promotion, in relation to the promotion of deferred shares and credit union subordinated debt will need to be aware of the requirements of COBS 4.2 (Fair, clear and not misleading communications) and COBS 4.5 (Communicating with retail clients).4

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 10C (FCA senior management regime for approved persons in relevant authorised persons),3SUP 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.
MCOB 4.5.1GRP
(1) There are certain additional disclosure requirements laid down by the Distance Marketing Directive that will have to be provided by a mortgage intermediary,6 a home purchase intermediary and a SRB intermediary64 to a consumer5 prior to the conclusion of a distance mortgage mediation contract,66 a distance home purchase mediation contract4 or a distance regulated sale and rent back mediation contract.6 The purpose of this section, MCOB 4.5, is to set out those additional requirements.
MCOB 6.9.11RRP
The SRB agreement provider must keep a record of the written pre-offer document at Stage One and the written offer document for signing at Stage Two for a period of:(1) one year after the end of the fixed term of the tenancy under the regulated sale and rent back agreement; or(2) five years from the date of the disclosures and warnings, written offer documents and cooling-off period notices;whichever is the longer.