Unit 3 Topic 8 Flashcards
Regulation and the buying process
Phil has arranged an MCD-regulated mortgage through his mortgage adviser, who has received a procuration fee of £225.00. The ESIS (European Standardised Information
Sheet) must state: (8.3.2)
A. that the payment is no more than £250.00, unless Phil asks for the actual amount.
B. the actual amount of the payment, if Phil asks for it.
C. that the payment is over £200.00
D. the actual amount of the payment.
D. the actual amount of the payment.
The ESIS must state the exact amount of commission or procuration fee payable by the lender to the intermediary
Firms must keep a record of an ESIS for a period of at least: (8.6.2)
A. one year from the date of the customer’s application
B. six months from the date the mortgage offer
C. one year from the date when the ESIS was issued
D. six months from the date of the customer’s application
A. one year from the date of the customer’s application
A firm must keep a record of the ESIS for a period of one year from the date of the customer’s application.
MCOB 6 sets out what information must be disclosed to the customer with the mortgage offer. This section of the rules applies only to: (8.7)
A. Mortgage lenders
B. Mortgage lenders and brokers
C. Mortgage intermediaries
D. Mortgage lenders, intermediaries and packagers
A. Mortgage lenders
The disclosure requirements for providing information at the offer stage apply only to lenders, although advisers would still need to be able to explain the details to their clients.
Financial promotions are not allowed, unless they are carried out by, or the content has been approved, by: (8.2)
A. an individual or firm authorised by the FCA
B. an approved person
C. a person who has a controlled function within the firm
D. a suitably-qualified individual
A. an individual or firm authorised by the FCA
Financial promotions must be carried out by, or the content approved by, an individual or a firm that’s authorised by the FCA
A financial promotion is defined as: (8.2)
A. Mediation activity
B. An offer to enter into pension activity
C. An offer to enter into life assurance activity.
D. An invitation or inducement to engage in investment activity
D. An invitation or inducement to engage in investment activity
A financial promotion is defined as ‘an invitation or inducement to engage in investment activity’
In relation to the range of mortgage products that a firm can offer, there are three types of service. Which is not one of these? (8.3.1)
A. Unlimited
B. Restricted
C. Limited Range
D. Single Lender
B. Restricted
Restricted is not a type of service provided by an authorised firm.
Which of the following must be shown in a non-real time promotion for an MCD regulated product, that wouldn’t be shown for a pre-March 16 regulated product ? (8.2.1 & 8.6.2))
A. Annual Percentage Rate of Charge (APRC)
B. Company address
C. Risk of repossession
D. Company name
A. Annual Percentage Rate of Charge (APRC)
Promotions for MCD-regulated products must show the Annual Percentage Rate of Charge (APRC), rather than the APR.
Which of the following types of customer would not be able to opt for an execution-only mortgage? (8.4.1)
A. Any customer who requests it
B. High-net-worth customers
C. Business customers
D. Customers who have received and rejected advice
A. Any customer who requests it
Not all customers can apply for a mortgage on an execution-only basis. Those that can are :
* High Net Worth Customers
* Professional customers
* Business customers
* Customers applying through internet or postal sales
* Customers who have received, but rejected advice
Which of the following would meet the FCA criteria to be a high-net-worth customer? (8.4.1)
A. Jason, whose mortgage loan is guaranteed by his father, who has net annual income of £350,000
B. Roger, who has net annual income of £250,000 and net assets of £2.5M
C. Naseem, who has net annual income of £275,000
D. Paul and Maxine who have joint net assets of £3.2M
A. Jason, whose mortgage loan is guaranteed by his father, who has net annual income of £350,000
Jason meets the FCA criteria because his obligations under a mortgage contract are guaranteed by a person with a minimum annual net income of £300,000 or minimum assets of £3m.
Under MCOB 5 and 5a, if a recommendation is made over the telephone, an illustration must be sent to the customer within: (8.6.1)
A. seven business days
B. five calendar days
C. seven calendar days
D. five business days
D. five business days
Sections 5 and 5a of the MCOB rules cover what information must be provided before the customer makes a mortgage application.
If a recommendation is made over the ‘phone, the illustration must be sent to the customer within five business days.
Firms must keep records of all non-real-time promotions, such as adverts, for which of the following periods? (8.2.1)
A. indefinitely
B. for at least six months from the time they were last used.
C. for at least twelve months
D. for at least twelve months from the time they were last used.
D. for at least twelve months from the time they were last used.
Non-real-time financial promotions are any promotions that don’t include interactive dialogue, such as e-mails, adverts, letters etc. Records of these promotions must be kept for at least 12 months since they were last used.
Which of the following information about the draft sales contract is incorrect? (7.3.3)
A. The purchaser’s solicitor prepares the draft sales contract.
B. The purchaser could seek redress if the vendor gives false information.
C. Details of the mortgage loan are not included.
D. The agreed sale price is specified.
A. The purchaser’s solicitor prepares the draft sales contract.
The draft sales contract is prepared by the vendor’s solicitor
