Related provisions for PERG 4.10.11
1 - 20 of 48 items.
There are three main conditions for regulated mortgage activities to be CBTL business:(1) the activities must relate to buy-to-let credit agreements (see PERG 4.10B.5G);(2) the borrower must be acting as a consumer (see PERG 4.10B.10G(2)); and(3) the activities must come within the definition of CBTL business (see PERG 4.10B.8G).
(1) A buy-to-let credit agreement means either:(a) a contract that at the time it is entered into has the following characteristics:(i) a lender provides credit to an individual or trustees (the 'borrower');(ii) the contract provides for the obligation of the borrower to repay to be secured by a mortgage on land in the United Kingdom3;(iii) at least 40% of that land is used, or is intended to be used, as or in connection with a dwelling2 (or, where trustees are the borrower, by
Table: Definition of consumer buy-to-let business
Activity |
Explanation |
Entering into, or promising to enter into, aCBTL credit agreement in the course of a trade, business or profession (acting as a CBTL lender) |
|
Administering a CBTL credit agreement in the course of a trade, business or profession (acting as a CBTL lender) |
See PERG 4.10B.11G(2) |
Acting as a CBTL arranger in relation to a CBTL credit agreement |
See PERG 4.10B.12G |
Acting as a CBTL adviser in relation to a CBTL credit agreement |
See PERG 4.10B.13 |
A CBTL credit agreement is explained in PERG 4.10B.10G |
|
A CBTL credit agreement means a contract that meets the following conditions: (1) it meets the definition of a buy-to-let credit agreement in PERG 4.10B.5G; and(2) it is not entered into by the borrower wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by the borrower.
(1) PERG 4.4.32G explains when a borrower is regarded as entering into a buy-to-let credit agreement for the purpose of a business carried on, or intended to be carried on, by the borrower.(2) A person administers a CBTL credit agreement if the person carries on administering a regulated mortgage contract in respect of the CBTL credit agreement, or would carry on that regulated activity in respect of the CBTL credit agreement if it was not a person included on the FCA register
A person is acting as a CBTL arranger if the person:(1) is not a lender as described in the first row of the table in PERG 4.10B.9G;(2) is not merely introducing, either directly or indirectly, a borrower to a lender or credit intermediary;(3) is acting in the course of the person’s trade, business or profession, for remuneration, which may take a pecuniary form or any other agreed form of financial consideration; and(4) meets one or more of the following conditions:(a) the person
(1) The definitions of CBTL arranger and CBTL adviser are largely the same as those under the legislation which implemented the MCD3.(2) There is guidance on these terms in PERG 4.10A (Activities within scope of3 the Mortgage Credit Directive).(3) The main difference between the definitions in this section and those in PERG 4.10A is that this section only relates to CBTL credit agreements.
A contract is excluded from the definition of regulated mortgage contract if, at the time it is entered into, it meets the following conditions:(1) it is a consumer buy-to-let mortgage contract within the meaning of the MCD Order (see PERG 4.10B.10G for an explanation of what this means); and(2) it is either:(a) of a kind outside the scope of the MCD3 by virtue of the exclusions summarised in PERG 4.10A.5G(1) to (8); or(b) a bridging loan (see PERG 4.13.6G).
(1) The exclusion for exempt consumer buy-to-let mortgage contracts has the effect that a person whose business covers exempt consumer buy-to-let lending does not have to consider its position in respect of Part 3 of the MCD Order or consider the exclusion in PERG 4.10B.2G.(2) However, exempt consumer buy-to-let lending is not excluded from the regime in Part 3 of the MCD Order altogether. This is because the Part 4A permission of a firm that has permission to carry out any of
The purpose of this section is to direct CBTL firms in relation to:the information that they must provide to the FCA on their CBTL business and their compliance with requirements imposed by Schedule 2 to the MCD Order; andthe time at which, and the manner and form in which, they must provide that information.[Note: article 18(1)(c) of the MCD Order]
(1) A CBTL firm must submit a duly completed consumer buy-to-let return to the FCA.(2) The return referred to in (1) must be submitted:(a) in the format set out in SUP 16 Annex 39AD; guidance notes for the completion of the return are set out in SUP 16 Annex 39BG;(b) online through the appropriate systems accessible from the FCA’s website; and(c) within 30 business days following the end of the reporting period.(3) The reporting period is the four calendar quarters beginning on
The circumstances in which a CBTL firm which has a Part 4A permission should notify the FCA include but are not limited to when:(1) it ceases to carry on CBTL business and does not propose to resume carrying on CBTL business in the immediate future. This does not include circumstances where the CBTL firm temporarily withdraws its products from the market or is preparing to launch fresh products; or(2) it applies to cancel its Part 4A permission; or(3) it applies to vary its Part
The circumstances in which a CBTL firm which does not have a Part 4A permission should notify the FCA include but are not limited to when:(1) it ceases to carry on CBTL business and does not propose to resume carrying on CBTL business in the immediate future; this does not include circumstances where the CBTL firm temporarily withdraws its products from the market or is preparing to launch fresh products; or(2) it changes its registered office or place of residence as the case
Any notification given by a CBTL firm under article 12 of the MCD Order should be:(1) in writing;(2) in English;(3) given to or addressed for the attention of the CBTL firm's usual supervisory contact at the FCA (where the CBTL firm does not have an identified supervisory contact this will be the FCA's Contact Centre);(4) delivered to the FCA by one of the methods in SUP 15.7.5AR to the appropriate address set out in SUP 15.7.6AG; and(5) given by a person who has full knowledge
A notification given under article 12 of the MCD Order should contain at least the following information:(1) the CBTL firm’s name and reference number;(2) the name and telephone, postal and email (where available) contact details of the person responsible for making the notification;(3) a statement that the notification is given under article 12 of the MCD Order;(4) a statement setting out the specific condition of article 8 of the MCD Order that the notification relates to;(5)
7The Ombudsman can consider a complaint under the Compulsory Jurisdiction if it relates to an act or omission by a firm in carrying on one or more of the following activities:(1) regulated activities
(other than 22administering a benchmark );1020(1A) payment services;7(1B) [deleted]1312(1C) CBTL business;14(2) [deleted]11321132(3) lending money secured by a charge on land;(4) lending money (excluding restricted credit where that is not a
credit-related regulated activity1132
);1132(5)
Complaints about acts or omissions include those7 in respect of activities for which the firm,931payment service provider7, 14electronic money issuer,15CBTL firm,16designated credit reference agency15 or designated finance platform16 is responsible (including business of any appointed representative or agent7 for which the firm,931payment institution,15electronic money institution,16designated credit reference agency15 or designated finance platform16 has accepted responsibi
The periodic fee referred to in FEES 4.3.1 R is (except in relation to the Society,10fee-paying payment service providers, CBTL firms,20fee-paying electronic money issuers and data reporting services providers20) 20 calculated as follows:107(1) identify each of the tariffs set out in Part 1 of FEES 4 Annex 2AR1727 which apply to the business of the firm for the period specified in that annex;27(2) for each of the applicable27 tariffs, calculate the sum payable in relation to
(1) [deleted]17272712112727111127(1A) [deleted] 1727(1B) [deleted] 1727(1C) 17If a person meets either of the conditions in (1D) it must pay the FCA the fee in (1E).(1D) 17A person meets the conditions referred to in (1C) if:(a) its periodic fee for the previous fee year was at least £50,000 and it is:(i) an FCA-authorised person; or(ii) a designated professional body; or(iii) a recognised investment exchange; or(iv) a regulated covered bondissuer; or(b) it is a PRA-authorised
The due dates for payment of periodic fees are modified by FEES 4.3.6R(3), FEES 4.3.6R(4)and FEES 4.3.6R(4A) respectively where:20(1) a firm has applied to cancel its:20(a) Part 4A permission; or20(b) its authorisation or registration under the Payment Services Regulations or the Electronic Money Regulations; or20(c) its registration as a CBTL firm under article 13(c) of the MCD Order; or20(d) authorisation under regulation 11 of the DRS Regulations; or20(2) the FCA has exercised
2SUP 5.5.1R and SUP 5.5.5R apply to former CBTL firms in relation to their CBTL business as guidance and as if:(1) a reference to firm in those rules were a reference to a CBTL firm;(2) section 166 of the Act were a reference to section 166 of the Act as applied by article 23(2)(b) of the MCD Order; and(3) the word “must” were replaced by the word “should”.
2The guidance in SUP 5.2.1G, SUP 5.3, SUP 5.4 (except SUP 5.4.1AG), and SUP 5.5 (except SUP 5.5.10G and SUP 5.5.11G) applies to CBTL firms and former CBTL firms in relation to their CBTL business as if:(1) a reference to firm in that guidance included a CBTL firm;(2) a reference to a section of the Act were a reference to that section as applied by article 23 of the MCD Order if applicable; and(3) a reference to the FCA's functions under the Act were a reference to the FCA's functions
3The exclusions in the Regulated Activities Order that relate to the various arranging activities are as follows.(-1) [deleted]228(1) Under article 26, arrangements that do not or would not bring about the transaction to which they relate are excluded from the arranging activities that relate to a particular transaction (see PERG 2.8.6G (1)) only. A person will bring about a transaction or a contract or plan variation only if his involvement in the chain of events leading to a
9The following activities are excluded from the regulated activity of credit broking:Introducing by individuals in the course of canvassing off trade premises(1) Activities carried on by an individual by canvassing off trade premises:(a) a restricted-use credit agreement to finance a transaction between the lender or a member of the lender's group and the borrower; or(b) a regulated consumer hire agreement;are excluded from credit broking, as long as the individual does not carry
3Advice given by an unauthorised person in relation to a home finance transaction or advising on regulated credit agreements for the acquisition of land12 in the circumstances referred to in PERG 2.8.6AG (5)(a) or (b) (Arranging deals in investments and arranging a home finance transaction) is also excluded. In addition:(1) the following exclusions apply in specified circumstances where a person is advising on investments, advising on regulated credit agreements for the acquisition
3The following exclusions apply in specified circumstances where a person is administering a home finance transaction:55(1) while acting as trustee or personal representative (see PERG 2.9.3 G);(2) in connection with the carrying on of a profession or of a business not otherwise consisting of regulated activities (see PERG 2.9.5 G);10(3) [deleted]22109(4) in connection with, or for the purposes of, managing a UK UCITS23 or managing an AIF and the person has a Part 4A permission
4A reference to firm in this chapter includes a reference to:15(1) a fee-paying payment service provider;15(2) a CBTL firm; 15(3) a fee-paying electronic money issuer;1415(4) a recognised investment exchange; and1415(5) a data reporting services provider. (other than an incoming data reporting services provider).1420126
(1) The periodic fees for collective investment schemes reflect the estimated costs to the FCA of considering proposals to change regulated collective investment schemes, maintaining up to date records about them, and related policy work.(2) [deleted]828(3) The periodic fees for fee-paying payment service providers, fee-paying electronic money issuers, CBTL firms, data reporting service providers (other than incoming data reporting services providers14 and issuers of regulated
5The most obvious example of a regulated mortgage contract is a loan made to an individual to enable the individual to buy a home for themselves where the loan is secured on that home. However, there is no requirement that the borrower should occupy the property. There is a requirement that at least 40% of the land should be used as a house, but no requirement that it is the borrower who uses it as a house. So, for example:(1) a loan may be a regulated mortgage contract if the
For a buy-to-let credit agreement (described in PERG 4.10B.5G), article 61A(5) of the Regulated Activities Order says that a borrower is to be regarded as entering into an agreement, or intending to enter into an agreement, for the purposes of a business if (1) or (2) are met:6(1) (a) the borrower previously purchased, or is entering into the contract in order to finance the purchase by the borrower of, the land secured by the mortgage;6(b) at the time of the purchase the borrower
1 The Mortgage Credit Directive (MCD) allowed3 for an exemption not to apply the MCD to buy-to-let lending if there was3 in place an appropriate framework for the regulation of these mortgages. The Mortgage Credit Directive Order 2015 (MCDO) is the vehicle through which the framework for “consumer buy-to-let” (CBTL) mortgages was3 established in order to comply with the MCD.
Details of how this chapter applies to each type of respondent are set out below. For this purpose, respondents include:(1) persons carrying on regulated activities (firms),1340 providing payment services (payment service providers)8 providing electronic money issuance services (electronic money issuers)201340carrying on CBTL business (CBTL firms), 22providing credit information under the Small and Medium Sized Business (Credit Information) Regulations (designated credit reference
(1) In this sourcebook, the term CBTL firm does not include a firm. A firm carrying on CBTL business is covered by this sourcebook as a firm.(2) CBTL firms are reminded of their obligation to retain information relevant to demonstrating the firm’s compliance or non-compliance with the requirements of Schedule 2 to the MCD Order.18
20Application fees for registration under article 8(1) of the MCD Order are set out in FEES 3 Annex 10AR. The fee depends on whether the firm holds an existing Part 4A permission or an interim permission or has previously registered as a CBTL firm and that registration has been revoked under article 13 of the MCD Order.
6CBTL firms are subject to a duty to deal with the FCA in an open and co-operative manner under article 18(1)(d) of the MCD Order. SUP 2.3 applies to CBTL firms in relation to complying with that duty as though:(1) a reference to firm included a reference to a CBTL firm;(2) a reference to the regulatory system were a reference to the provisions of the MCD Order, rules, directions and guidance applicable to CBTL firms;(3) a reference to Principle 11 were a reference to the duty
13To the extent that the appointment of the appointed representative includes CBTL business, a firm should satisfy itself that the terms of the contract with its appointed representative:(1) are designed to enable the firm to comply properly with any direction issued or imposed under article 19 of the MCD Order; and(2) require the appointed representative to deal with the FCA in an open and co-operative manner and give access to its premises, as set out in SUP 2.3.4G and SUP 2.3.5R(2),
A firm must ensure that its written contract with each of its appointed representatives:4(1) complies with the requirements prescribed in regulation 3 of the Appointed Representatives Regulations (see SUP 12.5.2 G);4(2) requires the appointed representative to comply, and to ensure that any persons who provide services to the appointed representative under a contract of services or a contract for service comply, with the relevant requirements in or under the Act (including the
12A CBTL firm must take reasonable care to ensure that:(1) individuals who are its appointed representatives; and(2) individuals who are employed or appointed by appointed representatives (whether under a contract of service or for services);who act in connection with the CBTL business of the appointed representative for which the CBTL firm has accepted responsibility satisfy the knowledge and competence requirements set out in paragraph 3 of Schedule 2 to the MCD Order.
An eligible complainant must be a person that is:127(1) a consumer3; or193(2) a
micro-enterprise3
;3(a) 3in relation to a complaint relating wholly or partly to payment services, either at the time of the conclusion of the payment service contract or at the time the complainant refers the complaint to the respondent; or(b) otherwise, at the time the complainant refers the complaint to the respondent; or19(3) a charity which has an annual income of less than £6.519 million at
127The following are not eligible complainants:(1) (in all jurisdictions) a firm, payment service provider,3electronic money issuer, 629CBTL firm, designated credit reference agency, designated finance platform13 or VJ participant whose complaint relates in any way to an activity which:8321110(a) the firm itself has permission to carry on; or(ab) 3the firm,629payment service provider, 10electronic money issuer,11CBTL firm,13designated credit reference agency11 or designated finance
1The effect of sections 20 (Authorised persons acting without permission) and 39(4) (Exemption of appointed representatives) of the Act is that the regulated activities covered by an appointed representative's appointment need to:(1) fall within the scope of the principal's permission; or(2) be excluded from being regulated activities when carried on by the principal, for example because:141111(a) 14they fall within article 28 of the Regulated Activities Order (Arranging transactions