Chapter 2: UK Mortgage Regulation

Question 1

What does MCOB stand for?

Answer 1

Mortgages and Home Finance: Conduct of Business sourcebook.

Question 2

Which two FCA Principles are most relevant to mortgage advice?

Answer 2

Principle 6 (Treat Customers Fairly) and Principle 7 (Clear, fair, not misleading).

Question 3

What document must be given when a mortgage is recommended?

Answer 3

ESIS – European Standardised Information Sheet.

Question 4

When is execution-only allowed?

Answer 4

Only in non-interactive sales, high-net-worth cases, or when client waives advice in writing.

Question 5

Who must hold a Level 3 mortgage qualification?

Answer 5

Any adviser giving regulated mortgage advice.

Question 6

What does the FCA require for affordability assessment?

Answer 6

Evidence-based assessment of income, expenditure, and potential rate stress.

Question 7

What is the main function of PRIN?

Answer 7

Set out high-level principles for regulated firms’ behaviour.

Question 8

What must be done if a client declines advice?

Answer 8

Ensure execution-only conditions are met and document it thoroughly.

Question 9

What does T&C stand for?

Answer 9

Training and Competence.

Question 10

What’s the risk if a firm fails to segregate client money?

Answer 10

Breach of FCA rules and potential enforcement action.