Regulated sale and rent back agreements meaning

Background to the regulation of regulated mortgage contracts and home finance transactions The oversight of regulated mortgage contracts, along with home reversion plans, home purchase plans, and regulated sale and rent back agreements (together termed ‘home finance transactions’), emerged at different stages. In 2000, HM Treasury signalled its plan to regulate mortgage lenders, and in December 2001 it updated those proposals to bring mortgage intermediaries within scope. On 31 October 2004—widely called M Day—both lenders and intermediaries dealing in regulated mortgage contracts (RMCs) became subject to regulation. Subsequently, the Regulation of Financial Services (Land Transactions) Act 2005 (RFS(LT)A 2005) was passed, empowering the Financial Conduct Authority (FCA), and before it the Financial Services Authority, to supervise activities akin to those already regulated for RMCs, but where the provider acquires land rather than merely advancing funds for the homeowner’s purchase. Consequently, the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, SI 2001/544 (RAO), was amended twice. These changes aligned land-related arrangements with the existing mortgage regime and established...

This Practice Note explores the Financial Conduct Authority (FCA’s) Mortgages and Home Finance: Conduct of Business sourcebook (MCOB) obligations on distribution and disclosure that apply to lenders, providers and intermediaries involved with regulated mortgage contracts (RMCs), home reversion plans (HRPs), home purchase plans (HPPs) and regulated sale and rent back agreements (SRBAs). Collectively, RMCs, HRPs, HPPs and SRBAs are termed home finance transactions (MCOB 1.2.2 G(1)). The relevant provisions sit mainly in MCOB chapters 4–9 (MCOB 4–MCOB 9). This Practice Note also explains the rules for accurately computing the annual percentage rate (APR) and the annual percentage rate charge (APRC) in chapters 10 and 10A of MCOB (MCOB 10 and MCOB 10A). For guidance on other elements of MCOB, see Practice Notes: Mortgage and home finance conduct of business—application and general requirements; Mortgage and home finance conduct of business—financial promotion regime; and Mortgage and home finance conduct of business—responsible lending, charges and arrears requirements. Purpose of MCOB advising and selling standards MCOB 4 sets out rules and guidance...

This Practice Note outlines the regime governing financial promotions and wider communications concerning regulated mortgage contracts (RMCs), home purchase plans (HPPs), home reversion plans (HRPs) and regulated sale and rent back agreements (SRBAs) — together described as home finance transactions — as contained in the Financial Conduct Authority’s (FCA) Mortgages and Home Finance: Conduct of Business sourcebook (MCOB), with particular focus on MCOB 3A and MCOB 3B. For guidance on other parts of MCOB, see Practice Notes: Mortgage and home finance conduct of business: application and general requirements, Mortgage and home finance conduct of business—distribution and disclosure requirements and Mortgage and home finance conduct of business—responsible lending, charges and arrears requirements. Application of MCOB 3A MCOB 3A covers the making or approval of any financial promotion that concerns qualifying credit. Definitions ‘Financial promotion’ means an invitation or inducement to enter into investment activity or to undertake claims management activity that is communicated in the course of business...