MCOB: Advising, Selling and Disclosure
The conduct rules that govern the sale itself, drawn from the FCA's Mortgages and Home Finance: Conduct of Business sourcebook (MCOB): suitability of advice, execution-only limits, pre-contract disclosure via the ESIS, and up-front disclosure of service and fees.
The advised sale and disclosure
Where advice is given, MCOB 4.7A requires the firm to assess the customer's needs and circumstances and recommend only a suitable regulated mortgage contract. Execution-only (non-advised) sales are tightly restricted and available only where no personal recommendation is made and the customer positively elects to proceed (MCOB 4.8A). Before the contract, the customer must receive a European Standardised Information Sheet (ESIS), which replaced the Key Facts Illustration under the Mortgage Credit Directive. Financial promotions must be clear, fair and not misleading, and the adviser must disclose the nature and scope of the service and how they are paid at the outset.