MCOB 4A Additional MCD advising and selling standards

An MCD mortgage arranger (unless it is also acting as an MCD mortgage lender and carrying out a direct sale of the proposed regulated mortgage contract) must, in good time before carrying out any MCD mortgage credit intermediation activity, provide the consumer with at least the following information in a durable medium:

1. (1)

   the identity and the geographical address of the MCD mortgage arranger;

2. (2)

   the Financial Services Register or other registers in which the MCD mortgage arranger has been included, the registration numbers, where applicable, and the means for verifying such registrations;

3. (3)

   whether the MCD mortgage arranger is an MCD mortgage adviser; and

4. (4)

   the procedures allowing consumers or other interested parties to complain to the MCD mortgage arranger, whether complaints may subsequently be referred to the Financial Ombudsman Service and, if so, the methods of having access to it.

An MCD mortgage credit intermediary who is not a tied MCD mortgage credit intermediary (unless it is also acting as an MCD mortgage lender and carrying out a direct sale of the proposed regulated mortgage contract), but who receives commission from one or more MCD mortgage lenders must, at the consumer's request, provide information on the variation in levels of commission payable by the MCD mortgage lenders providing the MCD regulated mortgage contract being offered to the consumer. The consumer must be informed that they have the right to request such information.

An MCD mortgage credit intermediary (unless it is also acting as an MCD mortgage lender and carrying out a direct sale of the proposed regulated mortgage contract) must inform the MCD mortgage lender of any fee payable by the consumer to the MCD mortgage credit intermediary for its services, for the purpose of calculating the APRC.

An MCD mortgage credit intermediary (unless it is also acting as an MCD mortgage lender and carrying out a direct sale of the proposed regulated mortgage contract) must require their appointed representatives to disclose to the consumer the capacity in which the appointed representative is acting and the MCD mortgage credit intermediary that the appointed representative is representing when contacting or before dealing with any consumer.

1. (1)

   An MCD mortgage lender or MCD mortgage credit intermediary must provide, orally or in a durable medium, adequate explanations to the consumer of the proposed MCD regulated mortgage contract and any ancillary services, before any binding offer is issued to that consumer, to enable the consumer to assess whether the proposed MCD regulated mortgage contract and ancillary services meets their needs and financial situation.

   [Note: article 16(1) of the MCD]

2. (2)

   The explanations must, where applicable, include:

   1. (a)

      the pre-contractual information to be provided in accordance with:

      1. (i)

         the ESIS or illustration; and

      2. (ii)

         in the case of an MCD mortgage credit intermediary (unless it is also acting as an MCD mortgage lender and carrying out a direct sale of the proposed MCD regulated mortgage contract), MCOB 4.4A.1R (1) and MCOB 4.4A.1R (2), MCOB 4.4A.4 R, MCOB 4.4A.8R (1)(a), (c), (d) and (2), and MCOB 4A.1.1 R to MCOB 4A.1.7 R

   2. (b)

      the essential characteristics of the products proposed;

   3. (c)

      the specific effects the products proposed may have on the consumer, including the consequences of default in payment by the consumer; and

   4. (d)

      where ancillary services are bundled with an MCD regulated mortgage contract, whether each component of the bundle can be terminated separately and the implications for the consumer of doing so.

   [Note: article 16(1) of the MCD]

In complying with MCOB 4A.2.1 R, a firm may adapt the manner and extent of giving the explanations, as well as the person giving them, according to:

1. (1)

   the circumstances of the situation in which the MCD regulated mortgage contract is offered;

2. (2)

   the consumer to whom it is offered; and

3. (3)

   the nature of the MCD regulated mortgage contract offered.

[Note: article 16(2) of the MCD]

An MCD mortgage adviser, or any other firm that is an MCD mortgage lender or an MCD mortgage arranger that provides advisory services within the meaning of article 4(21) of the MCD, must, for the particular transaction, explicitly inform the consumer whether advisory services are being, or can be, provided to the consumer.

Where an MCD mortgage adviser, or any other firm that is an MCD mortgage lender or an MCD mortgage arranger that provides advisory services within the meaning of article 4(21) of the MCD, advises on a transaction relating to an MCD regulated mortgage contract, it must give the consumer a record on paper, or in another durable medium, of the recommendation provided.