Related provisions for PERG 4.5.8A
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Article 4(4B) of the Regulated Activities Order says that where:(1) a person is: (a) a mortgage creditor (see PERG 4.10A.6 G); or(b) a credit intermediary (see PERG 4.10A.12 G); or (c) a person providing advisory services (see PERG 4.10A.20 G);under the MCD; and(2) that person is (ignoring the exclusions in (3)) carrying on one of the following regulated activities:(a) article 25A (arranging (bringing about) regulated mortgage contracts and making arrangements with a view to regulated
Article 4(4B) of the Regulated Activities Order only applies if the regulated mortgage contract is covered by the MCD. A regulated mortgage contract is covered if: (1) the lender is acting in the course of his trade, business or profession; and(2) the borrower is an individual; and(3) the borrower is acting for purposes which are outside their trade, business or profession; and(4) the regulated mortgage contract does not come within one of the exclusions summarised in PERG 4.10A.5
Therefore, article 4(4B) means that the Regulated Activities Order exclusions in PERG 4.10A.2G (3) do not apply to entering into a regulated mortgage contract as lender unless: (1) the regulated mortgage contract falls outside the MCD (see PERG 4.10A.5 G); or(2) the lender is not acting in the course of his trade, business or profession.
Where advising on regulated mortgage contracts falls within the MCD, the Regulated Activities Order exclusions in PERG 4.10A.2G (3) do not apply to this activity. Advisers should note that: (1) if the adviser does not act for remuneration, the MCD does not apply; (2) the MCD does not cover the regulated mortgage contracts listed in PERG 4.10A.5 G; (3) the MCD only applies to advisory services provided to consumers;(4) the MCD only applies to personal recommendations.
The tables provide a general indication of the investments and activities specified in the Regulated Activities Order that may correspond to categories provided for in the CRD6, 1MiFID3, AIFMD7, the UCITS Directive, the MCD9 or the Insurance Mediation Directive1. The tables do not provide definitive guidance as to whether a firm is carrying on an activity that is capable of being passported, nor do the tables take account of exceptions that remove the effect of articles. Whether
(1) 2CONC does not apply to credit agreements secured on land, with some limited exceptions as set out in (3) and (4), below. (2) Agreements secured by a second or subsequent charge on the customer’s home are, where regulated, governed by MCOB from 21 March 2016 (subject to transitional provisions allowing for the earlier adoption of MCOB). For detailed guidance on the regulation of secured lending, see PERG 4.(3) The agreements secured on land to which CONC may apply include
(1) 2CONC 1.2.8R and the rules applied by CONC 1.2.8R do not apply to an MCD article 3(1)(b) creditor or MCD article 3(1)(b) credit intermediary where the MCD article 3(1)(b) credit agreement would be an exempt agreement pursuant to article 60H(1) of the Regulated Activities Order but for:(a) paragraph (1)(b)(ii)(bb) of article 60H of the Regulated Activities Order (which relates to high net worth borrowers); or(b) article 60HA of the Regulated Activities Order (exemptions not
2The purpose of CONC 1.2.10R(1)(a) is to enable a high net worth borrower under an MCD article 3(1)(b) credit agreement to waive the protections and remedies applicable to regulated credit agreements, except for those that transpose or implement the MCD. The MCD does not contain an exemption or derogation in respect of borrowing above a certain amount, unlike the Consumer Credit Directive: the EUR75,000 threshold in that Directive has been implemented in the form of the exemption
(1) 3The exclusion in article 67 of the Regulated Activities Order (Activities carried on in the course of a profession or non-investment business) does not apply if applying the exclusion would take activities covered by the MCD outside the definition of certain regulated mortgage activities. (2) Please see PERG 4.10A (Activities regulated under the Mortgage Credit Directive) for more details.
(1) 3The exclusion in article 66 of the Regulated Activities Order (Trustees, nominees and personal representatives) does not apply if applying the exclusion would take activities covered by the MCD outside the definition of certain regulated mortgage activities. (2) Please see PERG 4.10A (Activities regulated under the Mortgage Credit Directive) for more details.
1There are exclusions that apply, in relation to each of the regulated mortgage activities and to advising on regulated credit agreements for the acquisition of land,6 if the person carrying on the activity is a local authority or a wholly owned subsidiary of a local authority. They can be found in article 72G of the Regulated Activities Order, but only apply where:63(a) the relevant agreement was entered into before 21 March 2016; or6(b) the relevant agreement is entered into
This group of exclusions applies, in specified circumstances, to the regulated activities of:(1) dealing in investments as principal;(2) arranging (bringing about) dealsininvestments and4making arrangements with a view to transactions in investments;44(2A) arranging a home finance transaction;4(3) managing investments;(4) assisting in the administration and performance of a contract of insurance;(5) safeguarding and administering investments;(6) sending dematerialised instructions;(7)
This group of exclusions applies, in specified circumstances, to the regulated activities of:(1) dealing in investments as agent;(2) arranging (bringing about) deals in investments, and4making arrangements with a view to transactions in investments;44(2A) arranging a home finance transaction;4(3) assisting in the administration and performance of a contract of insurance;(4) safeguarding and administering investments; and(5) advising on investments,15advising on regulated credit
(1) In accordance with article 3(2) of the E-Commerce Directive, all requirements on persons providing electronic commerce activities into the United Kingdom from the EEA are lifted, where these fall within the co-ordinated field and would restrict the freedom of such a firm to provide services. The coordinated field includes any requirement of a general or specific nature concerning the taking up or pursuit of electronic commerce activities. Authorisation requirements fall within
(1) 12Subject to (2), (3) and (4),15 the exclusions apply, in relation to any activity carried on by a local authority.15(2) The exclusion relating to the regulated activities of:(a) dealing in investments as agents;(b) arranging (bringing about) deals in investments;(c) making arrangements with a view to transactions in investments;(d) assisting in the administration and performance of a contract of insurance; and(e) advising on investments;applies to any activity carried on
The following provisions do not apply to an MCD article 3(1)(b) creditor or MCD article 3(1)(b) credit intermediary where the conditions in CONC 1.2.10R(1) and (2) are fulfilled: MCOB 7.5 (mortgages: statements) and MCOB 13 (arrears, payment shortfalls and repossessions) (except for MCOB 13.3.1AR to MCOB 13.3.1BG, MCOB 13.3.2AR to MCOB 13.3.8G, and MCOB 13.6.1R to MCOB 13.6.2G, which apply even where those conditions are fulfilled).[Note:article 60H(2) of the Regulated Activities
(1) For the purposes of articles 60H(1)(c) and 60Q(b) of the Regulated Activities Order and of CONC 1.2.10R(2), a declaration made by the borrower or hirer which provides that the borrower or hirer agrees to forgo the protection and remedies that would be available to the borrower or hirer if the agreement were a regulated credit agreement or a regulated consumer hire agreement must comply with CONC App 1.4.2R and either CONC App 1.4.6R or, in the case of an MCD article 3(1)(b)
2Declaration by high net worth borrower under an MCD article 3(1)(b) credit agreementThe declaration for the purposes of article 60H(1)(c) of the Regulated Activities Order and of CONC 1.2.10R(2) must have the following form and content-
“Declaration by high net worth borrower under an MCD article 3(1)(b) credit agreement
(article 60H(1)(c) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001)I confirm that I have received a copy of the statement of
10A contract is excluded from the definition of regulated mortgage contract if, at the time is entered into, it meets the following conditions:(1) it provides for credit to be granted by a ‘housing authority’ within the meaning of article 60E of the Regulated Activities Order. The definition in article 60E includes housing associations registered under the relevant housing legislation (see PERG 2.7.19FAG);(2) if entered into on or after 21 March 2016:(a) it is an agreement of
The firm may allocate the responsibility for its insurance mediation activity or MCD credit intermediation activity54 to an approved person (or persons) who is:5(1) (if the firm is not a relevant authorised person): 5(a) performing:5(i) an FCA governing function; or5(ii) a PRA governing function;5(other than a person who is a5non-executive director of the firm5); or(b) performing5 the apportionment and oversight function; or(c) performing5 the significant management function in
2When the Regulated Activities Order was amended to implement the MCD, the limitations mentioned in PERG 4.4A.1AG were removed: the legislative intention was to provide a single regulatory regime for mortgage contracts under MCOB from 21 March 2016, subject to a six month transitional period for first charge mortgages entered into before 31 October 2004. Mortgage contracts that were regulated mortgage contracts before that date did not cease to be regulated mortgage contracts.