NACFB Code of Practice

NACFBNACFB Code Of Practice Details

We are full members of the NACFB.

The National Association of Commercial Finance Brokers (NACFB) provide self regulation, continued professional development (CPD) and guidance to ensure it’s members are aware of legal and regulatory changes.

The NACFB also provide a complaints procedure which gives the client an ability to raise any issue not resolved satisfactorily to the NACFB.

With regard Lime Consultancy. The NACFB deal with commercial finance brokerage activities, they do not deal with other parts of our business.

NACFB Code of Practice

The NACFB code of practice is shown below, for further information please contact the NACFB directly – NACFB Website Link

Please be aware that this is the full Code of Practice and not all sections apply to Lime Consultancy. We suggest that if you have any queries with regard this code of practice narrative that you contact us in the first instance on 01293 541333.

Revision 20.4.09
National Association of
Commercial Finance Brokers
Code of Practice
2 4/09
NATIONAL ASSOCIATION OF COMMERCIAL FINANCE BROKERS CODE OF PRACTICE
___________________________________________________________________________
Section A: Objectives of the Association 3
Section B: Rules of Conduct 4
Section C: Complaints and Disciplinary Proceedings 7
Section D: Generally 12
Section E: Definitions & Notices 13
Section F: Code for Lease & Asset Finance Brokers 14
Section G: Code Residential Investment Mortgage Intermediaries 16
Section H: Code for Motor Vehicle Finance Brokers 20
Section I: Use of NACFB Logo 22
National Association of Commercial Finance Brokers
3 Silverdown Office Park, Fair Oak Close, Exeter, Devon EX5 2UX.
Tel: 01392 440040 Fax: 01392 363931, Email: admin@nacfb.org.uk
Registered Office: 3 Silverdown Office Park, Fair Oak Close,
Clyst Honiton, Exeter, Devon EX5 2UX
The National Association of Commercial Finance Brokers is a company limited by guarantee.
Registered in England and Wales No. 3305378

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Section A Objectives of the Association
___________________________________________________________________________
(these are a summarised form of the Objectives prescribed in the Association’s
Memorandum of Association).
Primary Objectives To maintain, promote and, when appropriate, enforce a Code
of Practice, for and on behalf of its members.
To achieve recognition by Government, lenders, other
professional bodies, the business community and the public, of
the Code’s objectives and of Members’ professionalism.
Secondary Objectives To encourage professional and social interaction between its
members.
To engage in discussions with lenders and their representative
organisations to secure advantageous trading terms or other
benefits to Members and to clients of Members.
To monitor any Bill, Act of Parliament, Regulation or Order
relevant to commercial lending or finance broking or related
areas and to make submissions to the appropriate authorities in
respect of any such material.
To arrange for information concerning the services and
professionalism of commercial finance brokers to be made
available to the business community and to the general public
by way of books, pamphlets, posters, letters, advertisements,
the internet or through the media.
To engage in or support programmes for the training and
education of Members or their staff.
To co-operate with and to establish working relationships with
any kindred associations or organisations.
To engage in all such other activities that further the primary
objectives of the Association as the Board, acting on behalf of
the Association, may decide from time to time.
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Section B Rules of Conduct
___________________________________________________________________________
1.
1.1 A Member (which for the purposes of the Code of Practice shall
include a Member or Associate elected under Article 4 of the
Constitution) shall conduct himself and his business so as to conform at
all times with:
1.1.1 the Association’s Code of Practice (and amendments and
revisions subsequent hereto);
1.1.2 the Objectives of the Association;
1.1.3 prevailing legislation;
1.2 No Member shall conduct his business in such a way as to give the
Association (acting through its Board) reasonable cause to believe
that his actions:
1.2.1 involve dishonesty, dishonourable or deceitful behaviour, or are
otherwise unfair to clients (whether or not criminal proceedings
have been instigated) or;
1.2.2 in the reasonable opinion of the Association bring, or are likely
to bring, the Association and its membership into disrepute or
unacceptably prejudice or compromise its reputation or
integrity.
2. A Member shall:
2.1 not seek, or acquire, business using business methods which in the
opinion of the Association (acting through its Board) are (or are likely
to be reasonably perceived to be) oppressive, dishonest, deceitful,
misrepresentative or in any other manner contrary to the aims or
standards of the Association;
2.2 not propose to a prospective client terms and conditions for the
provision of services which (applying standards recommended by the
Association from time to time) are anything other than fair and
reasonable;
2.3 prior to the acceptance of a client’s instructions, submit a
memorandum of instructions summarising the material terms on which
an approach to a funding source is to be based.
2.4 following submission to the client of the memorandum of instructions
obtain his client’s written acceptance to his Terms of Business. It is the
duty of the Member to inform the client, prior to acceptance, that
acceptance of the terms of business will constitute a legally binding
contract between Member and client [in the case of the Leasing and
Factoring divisions, in which fees are not generally payable by a client
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to a Member, paragraphs 2.3 and 2.4 will not apply unless,
exceptionally, the Member does charge his client with a fee, in which
event the paragraphs will apply in full];
2.5 not act in circumstances where the client cannot be represented with
a standard of competence consistent with their professional status;
2.6 at all times and when representing his client’s interests use all due
diligence, exercise reasonable care and skill in effecting his client’s
instructions and keep his client properly and regularly informed
including complying promptly with reasonable requests for
information;
2.7 disclose in writing to his client any existing conflict of interest or any
circumstances which might give rise to a conflict of interest;
2.8 disclose to his client all information within his actual knowledge which
is material to the client’s seeking of finance according to the
circumstances of his business;
2.9 in any matter treat clients and all other third parties at all times with
standards of fairness and courtesy consistent with the Member’s
professional status;
2.10 at all times respect (and ensure that his staff do likewise) the
confidentiality of information supplied to him in the course of his
business;
2.11 not make any profit for his own or any other person’s purposes by the
use of confidential information gained from the client;
2.12 give impartial and objective advice to his client free from any external
or adverse pressures or interest which would destroy or weaken the
Member’s independence or agency relationship with his client;
2.13 at all times only refer commercial finance proposals to reputable
lenders/funders;
2.14 not advertise or promote his services in such a way as to cause
offence, attract charges of poor taste or misrepresentation, or
breaches of prevailing legislation, or advertise in any style or content
likely to bring the Association and its Membership into disrepute.
(Acceptable advertising may include confirmation of his membership
of the Association by use of the Association’s logo.) Advertising will be
conducted in accordance with principles specified by prevailing
legislation or nationally recognised advertising Codes;
2.15 where client monies are held by a Member, for whatever period of
time, maintain a separately designated Client Account in respect of
client monies and the Member’s monies;
2.16 except where the client’s consent has been obtained, not solicit other
Member’s clients;
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2.17 avoid the charging or collection of any commission or other payment
which might be perceived, or construed as being, excessive or
incompatible with the prevailing terms of business normally applied in
the industry;
2.18 not give any undertaking, or other assurance, to a client or other third
party which cannot be discharged;
2.19 maintain proper records for the minimum statutory period(s) prescribed
from time to time (generally, but not exhaustively, six years) of all
business undertaken on behalf of a client and disclose such
information as the client may reasonably require subject to it arising
exclusively from the contractual Broker:Client relationship;
2.20 establish a complaints procedure which, if not providing satisfaction to
the complainant, provides for a complaint to be made to the
Association;
2.21 respond promptly and comprehensively to requests, whether written or
oral, for information requested by the Board in respect of complaints
lodged against the Member or for any other purpose reasonably
required by the Board;
2.22 ensure that his staff are fully aware of the Member’s responsibilities
under these Rules. The Member shall be deemed to be liable for any
breach of these Rules by his staff and shall be accountable to the
Association accordingly;
2.23 ensure that he is suitably licensed (and in accordance with prevailing
legislation or regulation) to undertake the business activity in which he
engages and that he maintains sufficient financial resources and
capital adequacy to secure the continuing solvency of the business of
the Member;
2.24 ensure that appropriate professional indemnity insurance is in force.
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Section C Complaints and Disciplinary Proceedings
1 Where the conduct of a Member shall appear in the reasonable opinion of
either:-
• the Board (acting on behalf of the Association pursuant to its powers
under Article 63 of the Constitution)
• one or more Members of the Association (independent of the Board)
• a client of a Member or other associated party
• a Patron
materially to breach these rules or otherwise be injurious to the reputation or
integrity of the Association or otherwise be objectionable in any respect a
complaint shall be submitted and heard in accordance with the provisions of
Rules C.1.1 to 6.1 inclusive as follows:
1.1 A formal written complaint must be lodged by, or on behalf of, the
complainant (who may include the Board acting under C.1 above),
with the Chief Executive of the Association who will notify it to the
Member concerned.
1.2 The complaint will first be considered by the Chief Executive who shall
have the right to call for such papers or information as he may require
and which are in the possession of the Member against whom the
complaint has been lodged (the papers to be submitted within 5
working days of the request), following which he will:
1.2.1 acknowledge receipt of the complaint to the complainant
within 10 working days of receipt of the complaint;
1.2.2 refer the matter to the Chairman of the Association’s
Compliance Committee with his preliminary recommendations,
(which may, if he considers there to be insufficient grounds,
include a recommendation to dismiss the complaint
summarily). The Chairman of the Committee may endorse the
Chief Executive’s recommendation to dismiss the complaint
summarily. The complainant will be informed of the summary
dismissal of the complaint within 15 working days of receipt of
the complaint (subject to the right of referral under 1.2.3 in
which event the time limits will be determined in accordance
with the provisions of 1.4). He may also instruct that the
complaint is heard by the Association’s Compliance
Committee (acting as a Complaints Committee and referred
to in Rules C.1.2.2. to 4.1 as “the Committee”) in accordance
with the provisions of paragraphs 1.2.3 to 2.7 inclusive.
The Committee shall have power to co-opt up to two
additional Members and, subject to a quorum of three, shall
act on behalf of the Board as a complaints and disciplinary
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committee. The Chairman of the Committee will be appointed
by the Board on such terms as they consider appropriate in
addition to a minimum of three other serving Directors. The
Deputy Chairman of the Association will not serve on the
Committee (except that in the event that the Chairman of the
Committee is unavailable the Deputy Chairman of the
Association shall take his place but the Deputy Chairman of
the Association shall not then chair, nor serve on, any Appeal
Committee convened under 2.3 to hear an appeal
consequent on the primary hearing). In the absence of the
Chairman of the Committee at the primary hearing the
Chairman of the Committee may chair the subsequent Appeal
Committee. The complaint must be heard within the time limit
expressed in 1.4.
1.2.3.1 The complainant will be informed in the letter of response from the
Chairman of the Committee under 1.2.1 above (the letter to be
despatched within 15 working days of receipt of the complaint) that
notwithstanding the summary dismissal of his complaint he may
nevertheless resubmit his complaint with the Chief Executive and
instruct that the matter be heard in accordance with the provisions
of Rules 1.2.2 to 2.7 inclusive.
1.2.3.2 The Chairman of the Committee may at his discretion, and with the
mutual consent of the complainant and the Member, recommend
that the complaint be resolved by mediation. The mediator will be a
party proposed by the Board and approved by the parties to the
complaint and will work to the time limits applicable to mediation
and stipulated by the Financial Ombudsman Service complaints
procedures. In the event that the matter is not resolved to the
complainant’s satisfaction he may nevertheless instruct that the
complaint is heard in accordance with the provisions of 1.2.2 to 2.7
inclusive.
1.3 In the event that the complaint is lodged against any one of the
Executive Officers or Directors it will be incumbent upon the
Association’s Chairman for the time being to co-opt a Member of the
Association willing to serve on the Board in place of that Executive
Officer or Director until the complaint (and any appeal) has been
discharged.
1.4 The complaint must be heard within 30 working days of the complaint
being received by the Chief Executive or 30 working days of the date
on which the complainant exercises his right to refer the matter to the
sub-Committee under paragraph 1.2.3.
1.5 the Member will be offered the opportunity to appear in person before
the Committee in order to justify or explain his conduct and/or to
make statements in writing if appropriate.
1.6 The Member may appear with and be represented by another person
nominated by him in writing prior to the hearing.
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1.7 The Committee’s decision which must be unanimous may include a
caution, reprimand or suspension pending further investigation, or
expulsion, and will be notified in writing to the Member and the
complainant within 5 working days of the hearing.
EXAMPLES of breaches which may justify immediate suspension, or expulsion,
(though not exhaustive), include:-
• conviction of any criminal offence which in the reasonable opinion of the
Board has brought, or is likely to bring, the Association into disrepute;
• if a petition for a Bankruptcy Order is presented against a Member (or,
where a corporate body, has a petition for an Administration Order
presented against it or resolves to present a petition for an Administration
Order or has a winding-up petition presented against it or is wound up
voluntarily or compulsorily in the United Kingdom or elsewhere);
• if it appears to the Board and is notified to a Member in writing that he no
longer continues to meet the current qualifications for Membership or any
condition for Membership from time to time imposed on him;
• a Member applies for an interim order under the Insolvency Act 1986 or
calls a meeting of his creditors for the purposes of an arrangement or
composition with his creditors or enters into any such arrangement under
the said Act; if being a corporate body, the Member calls a meeting of its
creditors or enters into any arrangement with its creditors under the
Companies Act 1985 or Insolvency Act 1986 or calls a meeting of its
members for the purposes of being wound up voluntarily (other than for
the purposes of a reconstruction or amalgamation) or has a winding-up
petition presented against it voluntarily or compulsorily in the United
Kingdom or elsewhere;
• where being engaged in any profession, or subject to the disciplines of a
duly authorised regulatory body, he shall be prohibited by the disciplinary
body of that profession or body from continuing to practice or to be
registered therewith;
NOTE: for the avoidance of doubt, a complaint notified in respect of an
agreement regulated by the Consumer Credit Act 1974 (as amended by the
Consumer Credit Act 2006), or by any other regulator governing the activities
of a Member’s business, will be governed by the provisions stipulated by the
regulator for the handling of complaints, and shall not be considered under
this section. In the event that it is established that the regulatory body
concerned does not have jurisdiction to hear the complaint, or the complaint
is not required to be heard by appropriate legislation, the complaint shall be
heard by the Association under the foregoing provisions.
2. APPEAL
2.1 In the event that the Member or the complainant wishes to appeal
against the finding of the Committee, he may serve written notice of
his intention to appeal to the Board.
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2.2 Notice of appeal must be served on the Chief Executive within 10
working days of the date on which the letter conveying the
Committee’s decision is dispatched.
2.3 The Board will convene an Appeal Committee which will be chaired by
a member of the Board nominated by the Board. The Committee will
comprise a minimum of three persons, including the Chairman so
appointed, who will fix the date for the appeal. The Chairman of the
Association (subject to the provisions of 1.2.2) shall not serve on the
Committee. The appeal must be heard within 30 working days of
receipt by the Chief Executive of notice of the appeal.
2.4 The Appeal Committee will exclude the members of the Committee
appointed to hear the original complaint.
2.5 The Member will be invited to attend the appeal and be represented
in accordance with the procedures determining attendance at the
primary hearing.
2.6 The decision of the Appeal Committee appointed by the Board
(based on a simple majority of votes) shall be conveyed in writing to
the Member and the complainant within 5 working days of the hearing
of the appeal.
2.6.1 Any decision made under Rule 1.7 or 2.6 shall include a
reference to the right of either party to the complaint or
disciplinary proceedings to apply to the Chartered Institute of
Arbitrators (details of the application requirements will be
provided by the Chief Executive).
2.6.2 Notice of a party’s intention to apply to the Institute of
Arbitrators must be given to the Chief Executive within 7
working days of the Appeal Committee’s decision and formal
application to the Institute (in the form prescribed by the
Institute) must be submitted to the Institute within 21 days of the
said decision.
2.7 Subject to the decision of any Arbitration proceedings the Appeal
Committee’s decision shall be final and binding on the Member and
the complainant.
3. CAUTION OR REPRIMAND
3.1 Subject to the rights of appeal herein before set out, the Committee
may issue a written caution or reprimand to the offending Member
and on such terms as to the Member’s future behaviour and
performance as it considers fit and appropriate in the circumstances.
4. SUSPENSION
4.1 Subject to the rights of appeal herein before set out, the Committee
shall have power to suspend a Member (including summary
suspension) whom it has reasonable cause to believe has breached
the Rules of Conduct (pending further investigation) or where it
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believes suspension to be appropriate pending the hearing of a
complaint or appeal under the foregoing procedures.
4.1.2 Suspension shall allow for a reasonable period of time in which the
alleged breach shall be investigated further but shall not exceed two
calendar months. The hearing of the complaint shall be reconvened
within five working days of completion of the additional investigation
and heard in accordance with the provisions stipulated in paragraphs
1.2 to 2.7 inclusive (the time limit stipulated in Para 1.4 shall take
account of the period of suspension, ending on the date on which the
hearing is reconvened).
4.2 The Member shall not in any circumstances be entitled to hold himself
out to be a Member of the Association whilst his membership remains
suspended and shall enjoy none of the privileges of membership
during such period.
4.3 The Member shall nevertheless continue to be subject to the Rules
during the period of suspension.
5. EXPULSION OR OTHER TERMINATION
5.1 If the decision of the disciplinary proceedings referred to above
(including any appeal) is for the expulsion of the Member (or other
termination of his membership) the Member shall cease to be a
Member of the Association and he shall not in any circumstances
thereafter be entitled to hold himself out to be a Member of the
Association in any way nor shall he have any rights on the Association
or its property or funds. If he does so the Association may take such
action (including legal proceedings) against him as it deems to be
necessary.
6. LEGAL PROCEEDINGS
6.1 In the event that criminal or civil proceedings are brought against a
Member whilst a complaint is being considered under the above Rules
the Committee will suspend the complaint proceedings pending the
outcome of the criminal action or civil proceedings.
7. PUBLICATION OF FINDINGS
7.1 Subject to any restrictions or obligations imposed on the Association
under prevailing legislation, the Association reserves the right to make
known its findings under disciplinary proceedings to the Members and
Patrons of the Association and, exceptionally, in any national, or trade,
newspaper or publication as it thinks fit.
7.2 Such information may be published, subject to external legal advice.
8. RESPONSIBILITY FOR THE ACTS OF OTHERS
8.1 A Member will be answerable (and accountable) to the Association
for the acts of all his partners, employees and directors (whether they
are registered individuals of the Association or not).
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Section D Generally
__________________________________________________________________________
1. This Code of Practice (as amended from time to time) shall be read in
conjunction with the provisions of the Constitution of the Association. In the
event that a conflict arises in the interpretation of the Code or the Constitution
the provisions of the Code of Practice will prevail.
2. A Member shall be deemed to have read and understood the Constitution
and Rules of Conduct at the time his application for Membership is accepted
and shall raise no objection in relation thereto.
3. The Rules are constantly under review but any subsequent amendments or
revisions thereto will be preceded by a reasonable period of notice to
Members of the Association. Notification of such changes shall be conducted
in accordance with the procedures stipulated in the Constitution.
4. The Rules are intended to determine the standards of integrity,
professionalism, conduct and practice expected of the Association’s
Members and for the further protection of the consumer. They do not, nor are
they intended to, affect the contractual relationship negotiated and agreed
in the ordinary course of Members business activities between Members and
their clients or other third parties.
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Section E Definitions and Notices
___________________________________________________________________________
Where the context so allows:
• The reference “Constitution” shall be deemed to be a reference to the
Association’s Memorandum and Articles of Association.
• The expression “Code of Practice” shall be deemed to include reference to the
Objectives, the Rules of Conduct and to the Complaint and Disciplinary
procedures contained herein and vice versa.
• Words importing the male gender include the female and neuter words in the
singular plural and vice versa and references to “acts” includes “omissions”.
• Reference to any provision of an Act of Parliament or Statutory Regulations
includes a reference to any subsequent statutory modification, re-enactment or
amendment of that provision for the time being in force.
• Notices: all correspondence and notices issued under the Rules of Conduct
should be delivered personally to or sent by first class post or facsimile transmission
to:
The Chief Executive,
The National Association of Commercial Finance Brokers,
3 Silverdown Office Park
Fair Oak Close
Clyst Honiton
Exeter
Devon
EX5 2UX
Fax: 01392 363931
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Section F
NACFB Code of Practice for
Lease and Asset Finance Brokers
1. INTRODUCTION
1.1 This section of the Code applies to any Member of the NACFB in the business
of broking or arranging asset finance deals, or acting in any other way as an
intermediary between an asset finance provider and a customer, where the
latter is a business or a public body (hereinafter referred to as “the
Intermediary”. It applies to any Intermediary who may engage in any activity
from the simple introduction of a customer to an asset finance provider
through to actively organising finance for a customer. In this context, asset
finance may include lease finance, hire purchase or such other finance as the
asset finance provider may offer and the customer may require, in relation to
equipment.
1.2 The Intermediary will be independent of the provider of funds for the
transaction and will obtain remuneration for its services. It may arrange,
structure and provide for the inclusion of other services in an asset finance
transaction.
1.3 The Intermediary may act as an intermediary between asset finance providers
and customers; or it may act as an Intermediary between asset finance
providers, the supplier of the goods and the customer. In some instances it
may have no contact with the customer.
1.4 Where appropriate NACFB members shall also adhere to the key
commitments and relevant provisions promoted in the FLA’s prevailing
Business Code of Practice and the Local Authority and NHS Business Code.
1.5 The Intermediary’s provision of services as described in 1.1 above will be on
terms consistent with their mandate to place business. The mandate may be
any written or verbal agreement that the Intermediary has with its client.
2. TERMS OF BUSINESS
2.1 Where dealing on behalf of the customer, the Intermediary will obtain the
customer’s consent to act on its behalf, setting out the terms of business
agreement (TBA) under which the Intermediary will provide services as
described in 1.1 above. Consent may be verbal or in writing. If a fee is paid by
the customer, written consent to the TBA, including the fee structure, must be
obtained. This TBA will be provided to the asset finance provider if requested.
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2.2 Where appropriate, the Intermediary will inform the asset finance provider:
2.2.1 That it is engaging in broker to broker transactions;
2.2.2 That it is paid a retainer by the customer;
2.2.3 Whether it is acting on behalf of either the customer or the supplier of
the goods;
2.2.4 That it has a financial or personal interest in either the supplier of the
goods or the customer’s business;
In addition, the Intermediary will, where appropriate, inform the asset finance
provider(s) and the customer:
2.2.5 That it is submitting written credit applications to more than one
finance provider and the number of such applications; and will inform
the customer that a record of each search will be stored;
2.2.6 That it has an interest in the residual value of the assets financed in a
deal;
2.2.7 That it is receiving a fee from both the asset finance provider(s) and
the customer.
2.3 Where searches are made for data on any individual, in respect of business
covered by this Section, that individual’s prior consent will be obtained in
writing or in any other durable medium by the Intermediary.
3. COMPLAINTS PROCEDURES
3.1 These are detailed in the NACFB’s Code of Practice.
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Section G
NACFB Code of Practice for
Residential Investment Mortgage
Intermediaries
1 SCOPE
1.1 The objective of this supplementary Code is to encourage best
practice amongst intermediaries who are instructed by borrowers to
select the most suitable types and sources of mortgage loans for the
purchase or refinance of residential letting properties. It is the
responsibility of the Member to check that the mortgage under
negotiation does not involve an activity which is regulated by the
Financial Services Authority.
The Code emphatically does not relate to, or seek to control any activity
that involves:
(a) Investment advice within the scope of prevailing financial services
legislation for advice
(b) The commercial implications of a Buy to Let purchase
(c) The suitability of property offered as security for a mortgage.
1.2 Notwithstanding 1.1 above, members shall refer their clients to the
Council of Mortgage Lenders’ Buy to Let guidelines, as published by
them from time to time (however published and whether by
electronic, website or other printed means).
2 DEFINITIONS
2.1 An intermediary is an individual, partnership or corporate body who/
that assists clients in the selection of a Residential Investment Mortgage
(RIM), and in the presentation of an application to a lender in order to
secure such a mortgage.
2.2 A RIM is any mortgage on a residential property which is, or has been,
purchased for the purpose of letting to residential tenant(s). It includes
changes of use of a property for this purpose. The Code has been
prepared on the basis, and understanding, that a RIM is a commercial
mortgage and is not regulated under prevailing financial services
legislation.
17 4/09
3 RULES OF CONDUCT
Subscribers to the Code shall:
3.1 Not seek or acquire business using methods that are, or are likely to be
regarded as oppressive, dishonest, deceitful, misrepresentative, or in
any other manner contrary to the objectives or standards of the
Association or are likely to undermine its integrity;
3.2 Propose to a potential client terms and conditions for the provision of
services which are fair and reasonable;
3.3 Use all due diligence, and take such action as is necessary and
appropriate, in protecting their clients’ interests and ensure that the
services applied to the arrangement of a loan comply with prevailing
relevant laws and regulation;
3.4 Respect (and ensure that staff do likewise) the confidentiality of
information supplied to them in the course of their business;
3.5 Only refer proposals to lenders who are authorised by the FSA or
comply with Section B, rule 2.13;
3.6 Give competent advice to clients on the most appropriate type of
mortgage for the purchase or refinance of a letting property, having
reviewed the client’s needs and financial circumstances, so far as is
divulged by the client, and appropriate comparable products;
3.7 Obtain the client’s written acceptance to a Terms of Business
Agreement (TBA) incorporating indicative terms. It is the duty of the
intermediary to inform the client, prior to acceptance, that
acceptance of the TBA will constitute a legally binding contract
between intermediary and client. Where fees are to be charged on
the “issue” of an offer of loan, the terms must not be materially
different from those contained in the “Indicative Terms”.
3.8 Assist clients in understanding the financial implications of their
mortgage and how the account will operate to include;
3.8.1 Repayment methods – Capital & Interest (or part) or Interest
only (or part) and term;
3.8.2 Flexible mortgages – how these products can affect risk
management and the positive and negative taxation
implications e.g. Vat efficiency versus deduction of tax;
3.8.3 Interest rates, clearly defined and described – e.g. variable,
fixed, base rate or Libor linked, capped, collars, discounted;
3.8.4 For interest only mortgages the responsibility to arrange a
method of repayment at the end of the term and warning of
the risks of failing to do so;
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3.8.5 Early repayment penalties and changes to interest payment at
the end of a fixed rate term;
3.8.6 Description of related insurances e.g. Building insurance, life
assurance, insurance protection against voids and tenant
default and mortgage payment protection (and whether it is a
condition of the mortgage that such additional cost shall be
incurred);
3.8.7 An explanation of related fees and costs e.g. valuation and
legal fees, arrangement fees, redemption fees and insurance
premiums.
3.8.8 Consumer Credit Act – the potential implications on the credit
ratings of borrowers residing at the same address as individuals
with adverse credit histories.
3.8.9 Explanation of the implications of referring the clients details to
credit reference agencies.
3.8.10 To caution potential borrowers that the security property may
be repossessed if instalments are not kept up to date, and that
property values may fall during the term of the loan.
3.9 Keep the client properly and regularly informed and comply promptly
with reasonable requests for information.
3.10 Disclose in writing to the client any conflict of interest or any
circumstances that might give rise to a conflict of interest i.e.
appointed agent of a lender and / or business relationship that exists
with the seller or his / her agent;
3.11 Charge fees, commissions or other payments that are compatible with
the prevailing terms of business normally applied in the industry. Unless
otherwise agreed between the client and broker, client fees should be
based on the successful arrangement of a mortgage and should not
generally exceed 1% of the gross advance;
3.12 Disclose to the client, upon their written request, the lender’s
commission and any other commissions / fees paid to them by other
parties involved in the transaction
3.13 Maintain and keep for the minimum statutory period(s) prescribed
from time to time (generally, but not exhaustively, six years) proper
records of all business undertaken on behalf of a client and disclose
such information as the client may reasonably require subject to it
arising exclusively from the contractual Intermediary: Client
relationship.
3.14 Maintain a company complaints procedure, which if not providing
satisfaction to the complainant, provides for a complaint to be made
to the Association (including under its Arbitration scheme).
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3.15 With the client’s or other complainants consent, and consistent with
prevailing data protection legislation, respond promptly and
comprehensively to requests, whether written or oral, for information
required by the Association in respect of complaints lodged against
the Member.
3.16 Ensure that staff are fully aware of the Member’s responsibilities under
these Rules. The Member shall be deemed to be liable for any breach
of these Rules by his staff and shall be accountable to the client and
to the Association accordingly.
4 MARKETING OF MORTGAGES
Subscribers shall:
4.1 Not send marketing material indiscriminately or to persons under the
age of 18 years.
4.2 Ensure that advertising complies with prevailing advertising standard
regulations, including those issued by the Financial Services Authority,
in that it is clear, fair, reasonable and not misleading.
5 COMPLAINTS
Procedures for handling complaints referred to the Association and
details of sanctions and appeals are set out in Section C of the full
NACFB Code of Practice. However, where a serious breach of the
Code of Practice is alleged, the Committee selected to hear the
complaint will additionally include a nominated IMLA or CML member.
6 GENERAL
Subscribers to this supplement of the NACFB Code of Practice are also
required to comply with other rules of conduct contained in the full
Code.
20 4/09
Section H
NACFB Code of Practice for Vehicle
Finance Brokers
1. INTRODUCTION
1.1 The attached Code of Practice of the National Association of Commercial
Finance Brokers, as revised below, applies to any Member of the NACFB
engaged, either wholly or partly, and whether in consideration of a fee or not,
in the business of broking or arranging motor vehicle finance, or acting in any
other way as an intermediary between a finance provider and a customer.
Motor vehicle finance includes contract hire, lease finance, hire purchase or
such other finance as the finance provider may offer and the customer may
require, in relation to vehicle.
1.2 The Member must act independently of the finance provider. He may
arrange, negotiate or provide for the inclusion of other related services in the
transaction.
1.3 The Member may act as an intermediary between motor vehicle finance
providers and customers or it may act as an intermediary between motor
vehicle finance providers, the supplier of the vehicles and the customer. In
some instances it may have no contact with the customer.
2. TERMS OF BUSINESS
2.1 The Member will confirm his instructions to the customer in the form of a written
agreement which shall include all relevant terms on which he will execute his
instructions.
2.2 The Member will also at all times:
2.2.1 Provide clear pricing and payment profiles ensuring that these are
included in quotations and all relevant documents.
2.2.2 Comply with the provisions of the Consumer Credit Act and all
legislation regulating consumer credit and other relevant forms of
finance
2.2.3 Ensure that vehicles being supplied to customers meet the current
manufacturers specification and standards at the time of delivery.
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2.3 Where credit searches are made for data on any individual, in respect of
business covered by this Section, that individual’s prior consent will be obtained
in writing or in any other durable medium by the Intermediary.
3. GENERAL COMPLIANCE AND COMPLAINTS PROCEDURES
3.1 In all other respects the Member shall submit to, and comply with, the terms
contained in the prevailing edition of the NACFB Code of Practice (sections A
to E inclusive), the current edition of which is attached.
22 4/09
Section I
1. USE OF NACFB LOGOS
NATIONAL ASSOCIATION OF COMMERCIAL FINANCE BROKERS
By an Ordinary Resolution carried at an Extraordinary General Meeting of NACFB held
on Friday the 11th of November 2005 the NACFB Code of Practice was amended with
effect from that date, as follows:
The Association’s Code of Practice shall be read and take effect with the addition of
the following supplemental Regulations governing the use of the Logos or Trademarks
(“the Marks”) of the National Association of Commercial Finance Brokers.
2. AUTHORISED USERS
Authorised users of the Marks of NACFB shall be members of NACFB who shall be
admitted and registered as Full members under Article 3 (a) of the Articles of
Association and Patrons who, at the discretion of the Board of NACFB, shall be
registered as Patrons of the Association.
Use of the NACFB Marks may be used, subject to these Regulations, by Full members
and Patrons registered under the foregoing paragraphs.
A full list of authorised users is open to inspection and, until otherwise notified, is held
at:
3 Silverdown Office Park
Fair Oak Close
Clyst Honiton
Exeter
EX5 2UX
Tel: 01392 440040
The Register is open to inspection during normal office hours, namely 0900 to 1700
Monday to Friday.
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CONDITIONS OF USE OF THE MARKS
The Marks are the absolute property of NACFB and shall not be used by any other
person or body otherwise than in accordance with these Regulations and the Code
of Practice.
The Marks may be reproduced only as follows (and in proportion to the context in
which they are being reproduced) applying Pantone Code No. 349
SANCTIONS AGAINST MIS-USE OF THE MARKS
If, having ceased to be a member of the NACFB, a party continues to use either or
both of the Marks, proceedings may be issued under the Trade Marks Act 1994 by the
Board of NACFB and such other legal action, including proceedings for monetary
compensation, may be taken as is considered appropriate to protect the Marks and
the integrity of the Association.
In the event of any dispute, correspondence should be addressed to the Chief
Executive or the Chairman for the time being of the Association at the address stated
above.
BY ORDER OF THE BOARD
Company Secretary
National Association of Commercial Finance Brokers
3 Silverdown Office Park
Fair Oak Close
Clyst Honiton
Exeter
EX4 3LS
The National Association of Commercial Finance Brokers is a company limited by
guarantee.
Registered in England and Wales No. 3305378
National Association of Commercial Finance Brokers
3, Silverdown Office Park, Fair Oak Close, Exeter EX5 2UX.
Tel: 01392 440040, Fax: 01392 363931, Email: admin@nacfb.org.uk
Registered Office: 3 Silverdown Office Park, Fair Oak Close, Clyst Honiton, Exeter EX5 2UX
The National Association of Commercial Finance Brokers is a company limited by guarantee.
Registered in England and Wales No. 3305378

A pdf copy of the NACFB Code of Practice can be downloaded here – memberPage

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