Transitional Provisions and Schedules
MCOB TP 1
Transitional Provisions
MCOB TP 1.1
Transitional Provisions
| (1) | (2) Material to which the transitional provision applies | (3) | (4) Transitional provision | (5) Transitional provision: dates in force | (6) Handbook provision: coming into force |
| 1 | Every rule in MCOB unless the context otherwise requires and subject to any more specific transitional provision relating to the matter. | R | If the application of any provision in MCOB is dependent on the occurrence of a series of events, some of which occur before, and some of which occur on or after, 31 October 2004, the provision applies with respect to the events that occur on or after 31 October 2004. | From 31 October 2004 for six months. | 31 October 2004 |
| 2 | G | (1) For example, if a customer submits an application for a regulated mortgage contract before 31 October 2004, a firm responding to that application on or after 31 October 2004 will not be required to provide the customer with an illustration in accordance with MCOB 5. However, the firm will have to comply with the requirements in MCOB when taking any further action (such as issuing an offer) regarding the application on or after 31 October 2004. (2) An offer document may have to be issued under transitional provision 1R even though no illustration has been given out (because that part of the transaction occurred before 31 October 2004). In such cases the suitably adapted illustration required by MCOB 6.4.4 R would need to omit: (a) the required text in MCOB 6.4.4 R (4)(b); and (b) Section 2 of the illustration entirely. |
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| 3 | G | MCOB applies to regulated mortgage contracts entered into on or after 31 October 2004. Variations made on or after that date to mortgage contracts entered into before that date are not subject to FSA regulation but may be subject to the Consumer Credit Act 1974. AUTH App 4.4.13 G contains guidance on the variation of contracts entered into before 31 October 2004. | |||
| 4 | MCOB 2.2.6 R | R | (1A) firm must disclose to a customer: (a) the extent to which transactions will be subject to FSA regulation, stating in particular the position with regard to advice (where given), disclosure and offer; (b) a statement that the Consumer Credit Act 1974 will not apply to the regulated mortgage contract and that, where applicable, any Consumer Credit Act rights or requirements set out in previous communications will not apply; and (c) details concerning complaints and redress for services provided before 31 October 2004 and those provided on or after 31 October 2004. (2) Unless already given to the customer before 31 October 2004, the information required in (1) must be communicated in a durable medium at the time of the first contact between the firm and the customer on or after 31 October 2004. |
From 31 October 2004 for six months | 31 October 2004 |
| 5 | MCOB 2.2.6 R | G | At 31 October 2004, there will be cases where a firm has issued documentation which satisfies the requirements of the Consumer Credit Act 1974 (HMSO legislation webpage), but where no CCA agreement has been concluded. A customer may even have signed a CCA agreement, which has not been executed before the onset of mortgage regulation. In such cases, a firm must take care to avoid giving the impression that any agreement reached on or after 31 October 2004 will be subject to the Consumer Credit Act 1974 (HMSO legislation webpage), as to imply otherwise might leave the firm in breach of MCOB 2.2.6 R. This is a particular risk given that any initial documentation that the customer will have received may have been in compliance with that Act. Equally, it is possible that once mortgage regulation begins, the customer would, in the absence of any information from the firm, form the view that the entire transaction is regulated by the FSA. Accordingly, in such a case, a firm must provide the customer with the information required by transitional provision 4R(1) and at the time and in the manner required by transitional provision 4R(2), in order to clarify the position. | ||
| 6 | MCOB 3.6 | R | (1) Providing it does not state or imply that protections under the Consumer Credit Act 1974 HMSO Consumer Credit Act 1974 (HMSO legislation webpage) apply, a non-real time qualifying credit promotion communicated: (a) in a directory (or similar publication) that is updated annually; (b) otherwise than in (a); on or after 31 October 2004 where the deadline for submission for communication was before that date will be in compliance with the rules in MCOB 3.6 if it satisfies the advertising requirements under the Consumer Credit Act 1974 (HMSO legislation webpage). (2) Paragraph (1) does not have effect if, and to the extent that, it would be inconsistent with any community obligation of the United Kingdom. |
(1)(a) From the later of 31 October 2004 or the date of first communication, for one year; (1)(b) From 31 October 2004 for three months |
31 October 2004 |
| 7 | MCOB 3.6 | G | (1) Mortgage lenders and mortgage administrators should take care to ensure that where they rely on transitional provision 6R for compliance with MCOB 3.6, they do not indicate in the non-real time qualifying credit promotion that protections under the Consumer Credit Act 1974 (HMSO legislation webpage) apply. (2) Where transitional provision 6R applies, a firm that confirms compliance with the rules in MCOB 3 under MCOB 3.9, or approves the non-real time qualifying credit promotion under MCOB 3.11 should confirm that the promotion meets the requirements of the Consumer Credit Act 1974 (HMSO legislation webpage). | ||
| 8 | R | A reference to: (a) an initial disclosure document in MCOB 4 Annex 1 R or MCOB 8 Annex 1; or(b) an illustration in MCOB 5 Annex 1 or MCOB 9 Annex 1; includes an initial disclosure document or illustration which complies with the rules in the Mortgages: Conduct of Business Sourcebook Instrument 2003, as amended by the Mortgages: Conduct of Business Sourcebook (Amendment) Instrument 2004. |
From 31 October 2004 until 31 May 2005 |
- 01/12/2004
MCOB Sch 1
Record keeping requirements
- 01/12/2004
MCOB Sch 1.1
See Notes
| The aim of the guidance in the following table is to give the reader a quick overall view of the relevant record keeping requirements. |
- 01/12/2004
MCOB Sch 1.2
See Notes
| It is not a complete statement of those requirements and should not be relied on as if it were. |
- 01/12/2004
MCOB Sch 1.3
See Notes
| Handbook reference | Subject of record | Contents of record | When record must be made | Retention period |
| Each non-real time financial promotion | Name of individual who confirmed compliance or approved the qualifying credit promotion, and the date of confirmation | Date of confirmation or approval | One year from the date on which the qualifying credit promotion was last communicated | |
| MCOB 3.10.2 G (2) to (5) | Each non-real time financial promotion | Details of: the medium for which the qualifying credit promotion was authorised; evidence supporting a material factual statement; evidence to show that any typical APR was representative of business | Date of confirmation or approval | One year from the date on which th qualifying credit promotion was last communicated |
| MCOB 3.10.3 G (1) | Each non-real time financial promotion | A copy of the qualifying credit promotion as finally published | Date of confirmation or approval | One year from the date on which the qualifying credit promotion was last communicated |
| MCOB 4.7.17 R (1)(a) | Suitability | Details of the customer information obtained, including the customer's needs and circumstances, for the purpose of assessing the suitability of a regulated mortgage contract | When the personal recommendation is made | Three years |
| MCOB 4.7.17 R (1)(b) | Suitability | An explanation of the reasons why the firm believes the personal recommendation complies with the suitability requirements in MCOB 4.7.4 R (1) | When the personal recommendation is made | Three years |
| MCOB 4.7.17 R (1)(b) | Suitability | An explanation of the reasons why a personal recommendation has been made on a basis other than that described in MCOB 4.7.13 E (1) | When the personal recommendation is made | Three years |
| MCOB 4.8.7 R | Scripted questions | A record of the scripted questions used in non-advised sales | The date on which the scripted questions are first used | One year from the date on which the scripted questions are superseded by a more up-to-date record |
| MCOB 4.6.11 R | Notice of cancellation | A record of the fact that notice has been given (including the original notice instructions and a copy of any receipt of notice issued) | When the firm first becomes aware that notice has been served | Three years |
| MCOB 5.4.19R | Each illustration a firm issues to a customer where the customer applies for that particular regulated mortgage contract | The Key facts illustrations (KFI) issued | The date the customer applies for the particular regulated mortgage contract | One year |
| MCOB 5.4.21R | Each KFI retained | Detail of: the date the KFI was issued; the date on which the customer applied for the regulated mortgage contract; and the medium through which the KFI was issued | The date the customer applies for the particular regulated mortgage contract | One year |
| MCOB 6.4.3R(1) | Offer document | Each offer document issued to the customer | The date on which the firm issues the offer document to the customer | One year |
| MCOB 6.4.3R(2) | Tariff of charges | A copy of the tariff of charges issued with, or as part of the offer document | The date on which the firm issues the tariff of charges to the customer | One year |
| MCOB 6.4.3R(3) | Supplemental information relating to mortgage credit cards | Information explaining that rights associated with a traditional credit card do not apply, | The date on which the firm issues the information to the customer | One year |
| MCOB 7.4.2R | Start of contract disclosure | The amount of the first and subsequent payments; the date and method of collection of the first and subsequent payments; details of insurance products and any repayment vehicle purchased through the firm, of the first premium payable and whether this is to be collected with the mortgage payment; detail of the repayment method, and if interest only a reminder to the customer to maintain a suitable repayment vehicle; what to do if the account falls into arrears; information about linked borrowing or savings available and whether or not overpayments or underpayments are permitted. | The date on which the firm issues the information to the customer | One year |
| MCOB 8.5.22R(1)(a) | Suitability | Details of the customer information obtained, including the customer's needs and circumstances, for the purpose of assessing the suitability of a regulated lifetime mortgage contract | When the personal recommendation is made | Three years |
| MCOB 8.5.22R(1)(b) | Suitability | An explanation of the reasons why the firm believes the personal recommendation complies with suitability requirements in MCOB 8.5.4R(1) | When the personal recommendation is made | Three years |
| MCOB 8.5.22R(1)(b) | Suitability | An explanation of the reasons why a personal recommendation has been made on a basis other than that described in MCOB 8.5.17E(1) | When the personal recommendation is made | Three years |
| MCOB 8.3.1R(1) | Scripted questions | A record of the scripted questions used in non-advised sales | The date on which the scripted questions are first used | One year from the date on which the scripted questions are superseded by a more up-to-date record |
| MCOB 8.3.1R(1) | Notice of cancellation | A record of the fact that notice has been given (including the original notice instructions and a copy of any receipt of notice issued) | When the firm first becomes aware that notice has been served | Three years |
| MCOB 9.3.1R | Each illustration a firm issues to a customer where the customer applies for that particular regulated lifetime mortgage contract | The Key facts illustrations (KFI) issued | The date the customer applies for the particular regulated lifetime mortgage contract | One year |
| MCOB 9.3.1R | Each KFI retained | Detail of: the date the KFI was issued; the date on which the customer applied for the regulated lifetime mortgage contract; and the medium through which the KFI was issued | The date the customer applies for the particular regulated lifetime mortgage contract | One year |
| MCOB 9.5.2R | Offer document | Each offer document issued to the customer | The date on which the firm issues the offer document to the customer | One year |
| MCOB 9.5.2R | Tariff of charges | A copy of the tariff of charges issued with, or as part of the offer document | The date on which the firm issues the tariff of charges to the customer | One year |
| MCOB 9.5.2R | Supplemental information relating to mortgage credit card | Information explaining that rights associated with a traditional credit card do not apply | The date on which the firm issues the information to the customer | One year |
| MCOB 9.7.10R | Start of contract disclosure where interest payments are required | The amount of the first and subsequent payments; the date, frequency and method of collection of the first and subsequent payments; the net amount the customer will receive where interest is deducted from income and the method by which this will be paid; details of insurance products purchased through the firm, of the first premium payable and whether this is to be collected with the mortgage payment; confirmation that the regulated lifetime mortgage contract is on an interest-only basis and details of how the firm expects the capital to be repaid; what to do if the account falls into arrears; information about linked borrowing or savings available and whether or not overpayments or underpayments are permitted. | The date on which the firm issues the information to the customer | One year |
| MCOB 9.6.1R | Illustrations required on event-driven changes to the contract | A copy of the illustrations issued for further advances requiring authorisation; rate switches and the removal or addition of a party to the contract | When the illustrations is issued | One year |
| MCOB 9.7.10R | Start of contract disclosure for a drawdown mortgage with fixed payments to the customer | The amount of the first and subsequent payments; the date of issue and method of the payment of the first and subsequent payments; details of insurance products purchased through the firm, and of the first and subsequent premiums and the method and date of collection; details of how the firm expects the capital and interest to be paid; information about linked borrowing or savings available and whether or not repayments are permitted | The date on which the firm issues the information to the customer | One year |
| MCOB 9.7.10R | Start of contract disclosure for a drawdown mortgage without fixed payments to the customer | Where the customer can choose the frequency of the payment, details of the limitations on frequency and amount of payments; where payments can vary for any other reasons, details of the amount of the first payment and how subsequent payments can vary; the method by which payments will be made; details of insurance products purchased through the firm, and of the first and subsequent premiums and the method and date of collection; details of how the firm expects the capital and interest to be paid; information about linked borrowing or savings available and whether or not repayments are permitted | The date on which the firm issues the information to the customer | One year |
| MCOB 9.7.10R | Start of contract disclosure where a lump sum payment to the customer is made and interest is rolled up | Confirmation if appropriate that no payments are required and details of how the firm expect capital and interest to be paid; if payments are to be made, the amount, frequency and method of collection of the first and subsequent payments; what to do in the case of arrears; details of insurance products purchased through the firm, and of the first and subsequent premiums and the method and date of collection; details of how the firm expects the capital and interest to be paid; information about linked borrowing or savings available and whether or not repayments are permitted | The date on which the firm issues the information to the customer | One year |
| MCOB 11.3.1R(2) | Ability of the customer to repay advance | Evidence to demonstrate that the firm has taken into account the customer's ability to repay | When the assessment of the customer's ability to repay is made | One year from the date on which the regulated mortgage contract is entered into, or the further advance provided |
| MCOB 11.3.4R(2) | Responsible lending policy | A record of the firm's written policy setting out the factors the firm will take into account in assessing the customer's ability to repay | The date on which the policy is set | One year from the date on which the policy is replaced |
| MCOB 13.3.9 | Dealings with customers in arrears or with a mortgage shortfall debt | Details of all communication with the customer; information relating to any repayment plan; date of issue of any legal proceedings; arrangements made for sale of a repossessed property; and the basis of any tailored information where the loan is for a business purpose. | The date on which the customer's account first falls into arrears | One year from the date on which the relevant payment shortfall or mortgage shortfall debt is cleared |
- 01/12/2004
MCOB Sch 2
Notification Requirements
- 01/12/2004
MCOB Sch 2.1
See Notes
| There are no notification requirements in MCOB. |
- 01/12/2004
MCOB Sch 3
Fees and other required payments
- 01/12/2004
MCOB Sch 3.1
See Notes
| There are no requirements for fees or other payments in MCOB. |
- 01/12/2004
MCOB Sch 4
Powers exercised
- 01/12/2004
MCOB Sch 4.1
See Notes
| The following powers and related provisions in or under the Act have been exercised by the FSA to make the rules in MCOB: | |
| Section 138 (General rule-making power) | |
| Section 139 (Miscellaneous ancillary matters) | |
| Section 145 (Financial promotion rules) | |
| Section 149 (Evidential provisions) | |
| Section 156 (General supplementary powers) | |
- 01/12/2004
MCOB Sch 4.2
See Notes
- 01/12/2004
MCOB Sch 5
Rights of action for damages
- 01/12/2004
MCOB Sch 5.1
See Notes
| The table below sets out the rules in MCOB contravention of which by an authorised person may be actionable under section 150 of the Act (Actions for damages) by a person who suffers loss as a result of the contravention. |
| If a "Yes" appears in the column headed "For private person?", the rule may be actionable by a private person under section 150 (or, in certain circumstances, his fiduciary or representative; see article 6(2) and (3)(c) of the Financial Services and Markets Act 2000 (Rights of Action) Regulations 2001 (SI 2001/2256)). A "Yes" in the column headed "Removed" indicates that the FSA has removed the right of action under section 150(2) of the Act. If so, a reference to the rule in which it is removed is also given. |
| The column headed "For other person?" indicates whether the rule may be actionable by a person other than a private person (or his fiduciary or representative) under article 6(2) and (3) of those Regulations. If so, an indication of the type of person by whom the rule may be actionable is given. |
- 01/12/2004
MCOB Sch 5.2
See Notes
| Chapter / Appendix | Section / Annex | Paragraph | Right of action under section 150 | |||
| For private person? | Removed? | For other person? | ||||
| All rules in MCOB with the status letter "E" | No | No | No | |||
| Any rule in MCOB which prohibits an authorised person from seeking to make provision excluding or restricting any duty or liability | Yes | No | Yes | Any other person | ||
| All other rules in MCOB | Yes | No | No | |||
- 01/12/2004
MCOB Sch 6
Rules that can be waived
- 01/12/2004