This chapter applies to any business that communicates or approves a financial promotion of qualified credit, a home exchange plan, or a regulated sale and leaseback agreement. Financial promotion may refer to other controlled investments in addition to qualified credit, repatriation plans and regulated sale and leaseback agreements, for example a leaflet from a building society describing the range of mortgage, savings and insurance products it offers. A national of an EEA country (excluding the United Kingdom) who wishes to benefit from the exemption in Article 36 of the Financial Promotion Order in relation to the financial promotion of a qualified credit, housing reversion scheme or regulated sale and leaseback agreement must comply with the rules in this Chapter.
The rules in this chapter do not apply to the communication or approval of a financial promotion of a home purchase plan. This chapter does not apply to a firm in relation to a qualifying credit financial promotion of a type listed in ■MCOB. This chapter does not apply to a firm in connection with a financial promotion of a home repossession plan or a regulated sale and leaseback arrangement of a type listed in ■MCOB 3.2.5 R, unless the firm approves the financial promotion.
A company may claim more than one exemption (as well as MCOB 3.3.1 R (Applicability: where?)) in relation to the same financial promotion. Businesses are reminded that financial promotions (including those that are exempt) may be subject to more general rules, including Principle 7 (Communication with Customers),■SYSC 3 to■SYSC 10 (Systems and Controls) and■MCOB 2.2.6 R( Clear, honest and non-misleading communication).
Exceptions to territorial scope: rules without territorial limitation for approval of financial promotions
Exceptions to territorial scope: financial promotions of qualifying credit relating to distance contracts
Meaning of 'communicated to a person inside or outside the United Kingdom'
Financial Promotion of Section 3.4 : Purpose
- Purpose
A person may not communicate a financial promotion in the course of business unless: a) is an authorized person; or b) the content of the financial promotion is confirmed by an authorized person. This chapter extends Principle 6 (Customer Interests) and Principle 7 (Communication with Customers) for activities.
Financial Promotion of Section 3.5 : General
- General
Other regulations and guidelines
Real time' and 'non-real time' qualifying credit promotions
Meaning of 'made', 'directed at' and 'recipient' in MCOB 3
Form and content of non-real time qualifying credit promotions
Name and contact point
Clear, fair and not misleading
Companies should therefore avoid including this information in financial campaigns that have a long shelf life, without a clear and distinct warning that the information may become out of date; and (3) companies must ensure that an appropriate description of mortgage products. For example, companies should take care to ensure that if an interest rate is variable at any point during the term of the mortgage, the content of the financial promotion does not mean that the rate can be fixed. The requirement in ■MCOB 3.6.4 E(1)(l) that certain information must be provided nearby means e.g. in connection with printed financial campaigns of qualifying credit, that all this information is visible at the same time.
To ensure that a financial promotion is clearly fair and not misleading, a firm must ensure that the financial promotion does not contain any of the following words or expressions, unless the relevant condition applies:. Finance' or 'Interest Free Option') indicating that a customer is liable to pay no greater amount in respect of a transaction financed by credit than the customer would be liable to pay as a cash buyer in respect of the same transaction, except where: . a) the total amount payable by the customer does not exceed the cash price; or. b) ■MCOB 3.6.26 R (Multi-rate mortgages) applies, in which case the expression can be used in respect of any cost rate of 0%. provided that during the period in which the rate applies no interest is charged and no increase in the amount of the. As a non-real-time financial promotion is specially designed for a targeted. collection of customers who are reasonably believed to have particular knowledge of the qualifying credit being promoted, this fact must be made clear.
Regarding opinion quotes:. a) when only part of the opinion is quoted, it must still be a fair presentation; and. A non-real-time financial promotion involving a qualifying credit that is contingent upon the customer acquiring one or more subsequent products from a particular company (or its agents or associates) must be prominently displayed. However, it does not introduce equivalent disclosure requirements for services or products that must be obtained as a condition of taking out a loan, but the customer is free to choose the supplier.
Required risk statements
If the promotion is also related to a home return plan, the statement can be adjusted to the extent necessary to meet the equivalent requirement for a home return plan (see. Your home can be repossessed if you do not keep up with repayments on your mortgage Where this is the case, the FCA will assess prominence in the context of the promotion as a whole.
Text positioning, background and text color and type may be used to ensure that the information described meets MCOB requirements. The inclusion of the required statements with other information should be avoided when this could reduce the importance that must be given to the statements. If foreign language versions of warnings are included, firms are reminded of the importance requirements in
Transient advertising
1) ■MCOB 3.6.15 R(1) is intended to distinguish between holiday promotions from "normal" commercial broadcast programs (where the text described in ■MCOB 3.6.13 R (Required Risk Statements) is not required) and promotions on holidays which are in or around.
Annual percentage rate (APR)
In relation to promotions on dedicated interactive television services, if the promotion is not contained in programming, but instead constitutes a separate feature, the exception offered by ■MCOB 3.6.15 R (1) would not be available. However, the requirement in ■MCOB 3.6.17 R(1)(c) will not be satisfied by textual devices, such as the use of brackets, which tend to reduce the effect of APR. If a financial campaign contains pricing information for more than one qualifying credit product,■MCOB 3.6.17 Requires an APR to be provided for each product.
Where more than one APR must be given, each APR must be no less prominent than:. If the non-real-time financial promotion is a contract where the APR varies (for example, depending on the customer's circumstances), the APR is required by■MCOB 3.6.17 R (Annual percent rate (APR)) that is representative of the business expected to result from the promotion. For the purposes of■MCOB 3.6.22 R, an APR is not representative of business unless it is an APR on or including at least 66% of customers who respond to the offer and who enter into a qualifying credit agreement that of the promotion would be charged.
If the financial promotion is for a new product or company, reference should be made to appropriate business plans instead. If the non-real-time qualifying credit financial promotion relates to a contract where the annual interest rate varies depending on the customer's circumstances, the following further statement should be included with appropriate visibility: 'The actual interest rate available will be depends on your circumstances.
Multi-rate mortgages
Fees for advice or arranging
Unsolicited real time financial promotions of qualifying credit, a
Meaning of 'solicited' and 'unsolicited' real time financial promotion
Prohibition on unsolicited real time financial promotions to customers
Form and content of real time qualifying credit promotions
A firm should note that■MCOB 3.7.3 R (Prohibition of unsolicited real-time promotions to customers) prevents a firm from communicating to a customer an unsolicited real-time financial promotion of qualifying credits, other than an exempt promotion (which is outside the of this Chapter) or where. Many requested real-time campaigns will be exempt campaigns (and therefore outside the scope of this chapter). A firm must ensure that a person making a real-time financial promotion of qualifying credit on the firm's behalf:.
It can also be different days of the week or other times if the company knows that a certain customer does not want to be called on that day or time, for example because of religion or night shift. For a telemarketing campaign that■MCOB 3.8.2 R and■MCOB 3.8.3 GAP apply, these records must contain copies of all scripts used. Companies should take note of the additional disclosure requirements in ■MCOB 4.4A.17 R (Additional disclosure when the initial contact is by telephone), ■MCOB 4.4A.18 R (Additional disclosure requirements when the services are to be provided remotely to a consumer) agreement) and■MCOB 4.5 (Supplemental Disclosure for Brokerage Agreements for Distant Mortgages and Brokerage Agreements for the Purchase of a Home with Retail Clients) regarding telephone calls that may fall under the definition of a financial promotion.
A Form and content of financial promotions of home reversion
Non-real time financial promotions to customers
No approval of real time financial promotions of a home reversion plan
Referring to the FCA
B Form and content of financial promotions of regulated sale and
A business communicating or endorsing a financial promotion of a regulated sale and leaseback agreement must take reasonable steps to ensure that the financial promotion is clear, fair and not misleading.
Ban on SRB leaflet dropping
Non-real time financial promotions to customers and advertisements
Exploitation of customer
No approval of real time financial promotions of a regulated sale and rent back agreement
Confirmation of compliance
Withdrawing confirmation
It has little application to a financial promotion that is transitory in nature, for example a text message on a mobile phone. Further, a financial promotion that expressly states as of a certain date shall not cease to comply with the rules in this chapter simply because the passage of time has rendered it obsolete. However, this does not mean that a financial promotion may include information (such as price information) which is likely to become out of date during the currency of the financial promotion regardless of the need for any financial promotion to be clear and right. and not misleading.
A firm may find it useful to set a relevant financial promotion with a 'review date', a date on which the financial promotion must be checked once again against the rules in this chapter. If it is found that it no longer meets these requirements, it should be withdrawn as soon as is reasonable.
Communicating a financial promotion where another firm has confirmed compliance
Records: non-real time financial promotions of qualifying credit, a
Requirement to make and retain records
Content of records
Communication and approval of qualifying credit promotions for an
Approval of qualifying credit promotions
No approval of real time qualifying credit promotions
Approval of qualifying credit promotions when not all the rules apply
Non-real time qualifying credit promotions for overseas persons
The Internet and other electronic media
Approach and general guidance
This section provides guidelines for using the Internet and other electronic media to communicate financial promotions. Companies are also referred to the guidelines in■MCOB 2.7 (Application to electronic media and remote communication). ITC Code of Advertising Standards and Practice on the use and appearance of overlapping text.
Any financial promotion of eligible credit, return home plan or regulated sale and rent back arrangement.
Specific guidance
Financial Promotion of Annex 1 qualifying credit, home reversion
3Examples of qualifying credit promotions