MCOB 4.2 Purpose

(1)

 This 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:

1. (a)

    customers are adequately informed about the range of home finance transactions available from firms and the basis of their remuneration;

2. (b)

    where advice is given, it is suitable for the customer.

3. (c)

    [deleted]

4. (d)

    the firm is able to provide an execution-only service except for certain vulnerable customers (customers for regulated sale and rent back and equity release transactions; customers whose main purpose is debt consolidation; and customers who are using the transaction in order to exercise a statutory “right to buy”) who are given advice in every case;

5. (e)

    execution-only sales are only provided where the customer has been warned about the implications of proceeding without advice, or where the customer has rejected advice which has been given, and has specifically instructed the firm that they wish to do so; and

6. (f)

    except in the case of regulated sale and rent back transactions, customers have the right to reject advice and proceed on an execution-only basis.

(3)

 This chapter also implements certain requirements of the Distance Marketing Directive in relation to distance mortgage mediation contracts and distance home purchase mediation contracts.