Introduction and Definitions | Mortgage and Home Finance Conduct of Business MCOB | Template for FCA Applications and Authorised Firms

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Mortgage & Home Finance Conduct of Business (MCOB)

[This section of the manual is an additional ‘add-on’ that is intended for use by firms with responsibilities under the MCOB Sourcebook. As many of the regulations and requirements in MCOB are business specific, it is essential that you go through this section and add in any controls, measures, policies & procedures applicable to your firm to comply with the FCA requirements. Numerous MCOB requirements have also been included throughout the manual]

6.1 Introduction

As a [Insert Business Type] firm with permissions for [Insert Mortgage & Home Finance specific permission/s], the company complies with all the rules and regulations set out in the FCA’s MCOB Sourcebook and any additional module handbook regulation with regards to mortgage advice, mortgage brokering and/or home finance. We understand that we have an obligation to develop and implement controls, systems and measures that comply with the regulatory requirements and the rules in the FCA Handbook and MCOB Sourcebook and this section of our compliance manual details our intent and objectives for doing so.

The MCOB Sourcebook applies to every firm that: –

• Carries on a home finance activity (subject to the business loan and loans to high net worth mortgage customers’ application provisions)
• Communicates or approves a financial promotion of qualifying credit, of a home purchase plan, of a home reversion plan or of a regulated sale and rent back agreement

6.1.1 MCOB Definitions

The MCOB Sourcebook applies to activities carried out in respect of regulated mortgage contracts, equity release transactions, home purchase plans, and regulated sale and rent back agreements. The products are referred to as home finance transactions by the FCA and for the purposes of the content in this compliance manual.

Lifetime mortgages and home reversion plans are together referred to as equity release transactions.

The MCOB Sourcebook references four types of firm: –

• Lenders/Providers
• Administrators
• Arrangers & Advisers (together referred to as intermediaries)

This includes those firms that provide business loans to customers under a regulated mortgage contracts (see MCOB 1.2.3 R to MCOB 1.2.9 G). A single firm may fall into more than one of these types.