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The Mortgage Credit Directive Order 2015

Draft. This instrument was laid in draft and may differ from the one made. Look for the made version under its title.

Draft 2015, ISBN 9780111130810

Original text. legislation.gov.uk does not revise statutory instruments, so later amendments are not shown here. Changes made to it are listed under each provision when known.

This draft Statutory Instrument supersedes the draft of the same title which was laid before Parliament and published on 26th January 2015 (ISBN 978-0-11-112774-2). It is being issued free of charge to all known recipients of that draft Statutory Instrument.

Draft Order laid before Parliament under paragraphs 2 and 2A of Schedule 2 to the European Communities Act 1972 and section 429(3) of, and paragraph 26(2) of Schedule 2 to, the Financial Services and Markets Act 2000 for approval by resolution of each House of Parliament

Financial Services And Markets

Made ***

Coming into force in accordance with article 1

The Treasury are a government department designatedf1 for the purposes of section 2(2) of the European Communities Act 1972f2 in relation to financial services.

In the opinion of the Treasury, one of the effects of this Order is that an activity which is not a regulated activity, within the meaning of the Financial Services and Markets Act 2000f3, will become a regulated activity.

This Order contains a provision restricting an exemption provided by an earlier Orderf4 made under section 38 of the Financial Services and Markets Act 2000.

A draft of this Order has been laid before and approved by a resolution of each House of Parliament in accordance with paragraphs 2 and 2A of Schedule 2 to the European Communities Act 1972f5 and section 429(3) of and paragraph 26(2) of Schedule 2 to the Financial Services and Markets Act 2000f6.

The Treasury make this Order in exercise of the powers conferred on them by section 2(2) of, and paragraph 1A of Schedule 2 to, the European Communities Act 1972f7 and sections 21(9) and (15), 22(1) and (5), 38, 409 and 428(3) of the Financial Services and Markets Act 2000f8.

Annotations to the whole text

Footnotes

f1

S.I. 2012/1759.

f2

1972 c. 68. Section 2(2) was amended by section 27(1)(a) of the Legislative and Regulatory Reform Act 2006 (c. 51) and the European Union (Amendment) Act 2008 (c. 7), Schedule, Part 1. By virtue of the amendment of section 1(2) by section 1 of the European Economic Area Act 1993 (c. 51) legislation may be made under section 2(2) of the European Communities Act to implement obligations of the United Kingdom created or arising by or under the Agreement on the European Economic Area signed at Oporto on 2nd May 1992 (Cm 2073) and the Protocol adjusting the Agreement signed at Brussels on 17th March 1992 (Cm 2183).

f3

2000 c.8.

f4

S.I. 2001/1201, amended by S.I. 2003/1675, 2005/592, 2006/2383, 2008/2831, 2009/1342, 2010/671, 2011/1626 and 2012/641 and 700; there are other amending instruments but none is relevant to this Order.

f5

Paragraph 2 was amended by section 27 of the Legislative and Regulatory Reform Act 2006 (c. 51) and paragraph 2A was inserted by section 29 of that Act.

f6

Paragraph 26 of Schedule 2 was substituted by section 8 of the Financial Services Act 2012 (c. 21).

f7

Paragraph 1A of Schedule 2 was inserted by section 28 of the Legislative and Regulatory Reform Act 2006 and amended by Part 1 of the Schedule to the European Union (Amendment) Act 2008 and S.I. 2007/1388.

f8

Section 14A of the Interpretation Act 1978 (c. 30) (inserted by section 59 of the Enterprise and Regulatory Reform Act 2013 (c. 24)) provides that, where an Act provides a power to make subordinate legislation, that subordinate legislation may include a requirement to review the effectiveness of the legislation.

Contents

  1. Part 1: Introductory Provisions
  2. 1Citation and commencement
  3. 2Interpretation
  4. Part 2: Amendments to legislation
  5. 3Amendments to legislation
  6. Part 3: Consumer buy-to-let mortgages
  7. 4Interpretation of this Part
  8. 5Meaning of credit intermediary
  9. 6Meaning of advisory services
  10. 7Limitation on permission to carry on regulated activities
  11. 8Register of consumer buy-to-let mortgage firms
  12. 9Applications for entry on the register or variation of an existing entry on the register
  13. 10Determination of applications
  14. 11Procedure when refusing an application
  15. 12Registered consumer buy-to-let mortgage firm ceasing to meet the requirements for registration
  16. 13Revocation of registration
  17. 14Procedure on revocation
  18. 15Suspension of registration
  19. 16Procedure on suspension
  20. 17Appointed representatives
  21. 18Obligations of registered consumer buy-to-let mortgage firms
  22. 19Power to direct registered consumer buy-to-let mortgage firms to take appropriate action
  23. 20Functions of the FCA in relation to this Part
  24. 21Monitoring and enforcement
  25. 22Guidance
  26. 23Application of provisions of the Act to registered consumer-buy-to-let mortgage firms
  27. 24Application of procedural provisions of the Act
  28. 25Application of provisions of the Act to the FCA in respect of its supervision of consumer buy-to-let mortgage firms
  29. 26Extension of the compulsory jurisdiction of the Financial Ombudsman Scheme to registered consumer buy-to-let mortgage firms
  30. Part 4: Transitional Provisions
  31. 27Transitional provision: person with Part 4A permission to carry on an activity in relation to a regulated mortgage contract before 21st March 2016
  32. 28Transitional provision: agreements before 21st March 2016
  33. 29Transitional provision: consumer credit back book mortgage contracts
  34. 30Transitional provision: person engaged in consumer buy-to-let mortgage business before 20th March 2014
  35. 31Transitional provision: person subject to the Consumer Credit Act 1974 who chooses to adopt new rules before 21st March 2016
  36. 32FCA power to direct timing of applications for permission and registration
  37. Part 5: Review
  38. 33Review
  39. Signature
  40. Schedule 1: Amendments to legislation
  41. Part 1: Amendments to primary legislation
  42. 1The Financial Services and Markets Act 2000
  43. 2The Consumer Credit Act 1974
  44. Part 2: Amendments to secondary legislation
  45. 3The Consumer Credit (Agreements) Regulations 1983
  46. 4The Financial Services and Markets (Regulated Activities) Order 2001
  47. 5The Financial Services and Markets Act 2000 (Exemption) Order 2001
  48. 6The Financial Services and Markets Act 2000 (Compensation Scheme: Electing Participants) Regulations 2001
  49. 7The Financial Services and Markets Act 2000 (Appointed Representatives) Regulations 2001
  50. 8The Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001
  51. 9The Financial Services and Markets Act 2000 (EEA Passport Rights) Regulations 2001
  52. 10The Financial Services and Markets Act 2000 (Gibraltar) Order 2001
  53. 11The Consumer Credit (Disclosure of Information) Regulations 2004
  54. 12The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005
  55. 13The Consumer Credit (Disclosure of Information) Regulations 2010
  56. 14The Consumer Credit (Agreements) Regulations 2010
  57. 15The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2013
  58. Schedule 2: Requirements for registered consumer buy-to-let mortgage firms
  59. Conditions applicable to creditors and credit intermediaries
  60. 1Conduct of business obligations when providing consumer buy-to-let mortgage products to consumers
  61. 2Obligation to provide information free of charge to consumers
  62. 3Knowledge and competence requirements for staff
  63. Information and practices preliminary to the conclusion of the consumer buy-to-let mortgage contract
  64. 4Tying and bundling practices
  65. 5General information
  66. 6Pre-contractual information
  67. 7Information requirements concerning credit intermediaries
  68. 8Adequate explanations
  69. Annual percentage rate of charge
  70. 9Calculation of the annual percentage rate of charge
  71. Creditworthiness assessment
  72. 10Obligation to assess the creditworthiness of the borrower
  73. 11Property valuation
  74. 12Disclosure and verification of borrower information
  75. Advisory services
  76. 13Standards for advisory services
  77. Foreign currency loans and variable rate loans
  78. 14Foreign currency loans
  79. 15Variable rate credits
  80. Sound execution of consumer buy-to-let mortgage contracts and related rights
  81. 16Early repayment
  82. 17Flexible and reliable markets
  83. 18Information concerning changes in the borrowing rate
  84. 19Arrears and possession
  85. Calculation of the annual percentage rate of charge
  86. 20Basic equation expressing the equivalence of drawdowns on the one hand and repayments and charges on the other
  87. 21Additional assumptions for the calculation of the annual percentage rate of charge
  88. Explanatory note