MCOB 15 P2P home finance activities

MCOB 3A (financial promotions etc) applies to a firm which is a P2P platform operator communicating or approving a financial promotion of a P2P agreement which is a home finance transaction where the lender or provider does not require permission to enter into the transaction. It applies as though references to qualifying credit were references to agreements that would be qualifying credit but for the lender not carrying on regulated activity by result matched startentering intoresult matched end or administering a regulated mortgage contract.

MCOB 13 (payment difficulties and repossessions) applies to a firm which is a P2P platform operator in respect of regulated mortgage contracts or home purchase plans. It applies as though:

1. (1)

   references to a mortgage administrator or a home purchase administrator include a P2P platform operator;

2. (2)

   references to administering a regulated mortgage contract, administering a home purchase plan and administering a sale shortfall include a P2P platform operator administering such an agreement or shortfall on behalf of a lender or plan provider. References expressing the same concept but using different tenses are similarly included; and

3. (3)

   references to a firm taking any action against a customer include where the firm takes action required by a security trustee holding rights for a lender or provider under a regulated mortgage contract or home purchase plan.

Where a provision of MCOB applies to a firm which is a P2P platform operator and requires the firm to refer to the identity of the mortgage lender, home purchase provider, reversion provider or SRB agreement provider, the provision may be satisfied by a statement that the loan, plan or agreement is provided by investors facilitated by the P2P platform operator.

Where a provision of MCOB applies to a firm which is a P2P platform operator and refers to the “lender’s base mortgage rate”, “the lender’s standard variable rate” or a similar phrase, the firm must refer to the firm’s base mortgage rate or standard variable rate, as the case may be.

Where a provision of MCOB applies to a firm which is a P2P platform operator, that provision applies as if:

1. (1)

   references to a firm entering into a home finance transaction (or any particular type or types of home finance transaction) with a customer include the firm which is the P2P platform operator facilitating a lender or provider entering into such a home finance transaction with a customer;

2. (2)

   references to a firm varying an existing home finance transaction (or any particular type or types of home finance transaction) include the firm which is the P2P platform operator varying such an agreement or plan on behalf of a lender or provider; and

3. (3)

   other references to a mortgage lender, home purchase provider, reversion provider or SRB agreement provider include the P2P platform operator.

Where a provision of MCOB applies to a firm which is a P2P platform operator and requires the firm to provide an illustration, the firm may provide a European Standardised Information Sheet (ESIS) instead. The ESIS may diverge from the requirements of MCOB 5A where it is necessary to do so to describe the aggregate terms and effects of all the home finance transactions comprising the arrangement with the customer, taken together.

MCOB 2.6A.-1R (inclusion and reliance on certain interest terms in agreements) applies to a firm which is a P2P platform operator as if:

1. (1)

   in place of the firm not relying on a term mentioned in that rule it referred to the firm not taking steps to exercise or enforce rights under such a term; and

2. (2)

   in place of referring to a term permitting the firm to change the rate of interest, it referred to a term permitting that rate to be changed.

The “relevant market” referred to in MCOB 4.4A.2R in relation to a firm which is a P2P platform operator is the market for regulated mortgage contracts offered by such platforms.

In disclosing remuneration under MCOB 4.4A.8R, a firm which is a P2P platform operator is not required to disclose any fees paid by a lender.

The following rules apply subject to the modifications to MCOB 4.4A set out elsewhere in MCOB 15.4:

1. (1)

   MCOB 4.4A.9R (method of providing initial disclosure in all cases);

2. (2)

   MCOB 4.4A.12R (timing of initial disclosure in all cases);

3. (3)

   MCOB 4.4A.18R (additional disclosure under distance contracts); and

4. (4)

   the rules in MCOB 4.10 (home purchase plans: sales standards).

MCOB 4.6A.1R (rolling up of fees etc. into loans) applies to a firm which is a P2P platform operator facilitating a regulated mortgage contract with the modification that, in addition to the firm not offering a regulated mortgage contract to a customer, the firm must also not facilitate the entry of a customer into a such a contract.

MCOB 5.5.1R (timing of provision of mortgage illustration) and MCOB 5.8.1R (financial information statement: timing) apply to a firm which is a P2P platform operator on the basis that the application for that particular regulated mortgage contract or home purchase plan is made to the firm.

Where MCOB 5.6 applies to a firm which is a P2P platform operator facilitating a regulated mortgage contract, and the illustration is issued to the customer by, or on behalf of, a separate mortgage intermediary, references in MCOB 5.6.113R to 5.6.119G to a mortgage lender must be treated as referring to the P2P platform operator.

MCOB 6.4.5G (information about advice provided by mortgage intermediary) applies to a firm which is a P2P platform operator as if the references to the mortgage lender are references to the P2P platform operator and references to a mortgage intermediary are references to a person other than the P2P platform operator.

Where MCOB 9.4 applies to a firm which is a P2P platform operator facilitating a lifetime mortgage, and the illustration is issued to the customer by, or on behalf of, a separate mortgage intermediary, references in MCOB 9.4.119R to 9.4.125G to a mortgage lender must be treated as referring to the P2P platform operator.

Where MCOB 9.4 applies to a firm which is a P2P platform operator facilitating a home reversion plan, and the illustration is issued to the customer by, or on behalf of, a separate reversion intermediary, references in MCOB 9.4.168R to 9.4.174R to a reversion provider must be treated as referring to the P2P platform operator.

Where MCOB 11.8 (customers unable to change contract, plan or provider) applies in relation to a regulated mortgage contract or home purchase plan facilitated by a P2P platform operator, MCOB 11.8.1E applies as if the reference to a customer being unable to enter into a new regulated mortgage contract or home purchase plan or vary the terms of the existing regulated mortgage contract or a home purchase plan, with the existing or a new mortgage lender or home purchase provider, is a reference to a customer being unable to enter into a new regulated mortgage contract or home purchase plan or vary the terms of an existing regulated mortgage contract or home purchase plan, which is facilitated by the platform.

The rules in the following provisions of MCOB do not apply to an MCD mortgage credit intermediary, where that firm is a P2P platform operator facilitating a regulated mortgage contract where the lender does not require permission to enter into the contract:

1. (1)

   MCOB 2A (Mortgage Credit Directive);

2. (2)

   MCOB 3A.5 (MCD financial promotions);

3. (3)

   MCOB 3B (MCD general information);

4. (4)

   MCOB 4.4A.4R (range of products);

5. (5)

   MCOB 4A (additional MCD advising and selling standards);

6. (6)

   MCOB 5.6.113R to 5.6.117R (payments to mortgage intermediaries) do not apply to a mortgage intermediary which is a P2P platform operator where the lenders under regulated mortgage contracts entered into by a particular borrower do not require permission for entering into regulated mortgage contracts. In this case Section 14 of the illustration must be renumbered 13;

7. (7)

   MCOB 5A (MCD pre-application disclosure);

8. (8)

   MCOB 6A (MCD disclosure at the offer stage);

9. (9)

   MCOB 7A (additional MCD disclosure: start of contract and after sale); and

10. (10)

    MCOB 11A (additional MCD responsible lending requirements).