On 17 March 2016 the Financial Services and Markets Act 2000 (Regulated Activities)(Amendment) Order 2016 (SI 2016/392) (the Order) was published, together with an explanatory memorandum, which makes legislative amendments to the regulation of activities connected with lending.
- The Order amends the following legislation extending to all of the UK:
- The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/544).
- The Consumer Credit Act 1974.
- The Financial Services and Markets Act 2000 (Exemption) Order 2001 (SI 2001/1201).
- The Financial Services and Markets Act 2000 (Appointed Representatives) Regulations 2001 (SI 2001/1217).
- The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (SI 2005/1529).
- The Mortgage Credit Directive Order 2015 (SI 2015/910).
Important amendments include:
- Peer-to-peer lending (PTP). The Government is aligning the treatment of PTP loans with other ISA qualifying investments. From 6 April 2016, repayments of interest and capital made to lenders on new PTP loans will qualify for tax advantages where these loans are held in a new form of ISA (the innovative finance ISA).
- Mortgage lending. The Order provides for a transitional period until 21 March 2017 before first charge mortgages, which were entered into before 31 October 2004 and are currently regulated as consumer credit agreements, must be regulated mortgages. The Order also ensures that all of the regulated activities applicable to regulated mortgage contracts apply to mortgages which were entered into before 31 October 2004, and that the promotion of those activities is regulated.
- Other credit granted to consumers. The Order clarifies that the regulatory status of consumer credit agreements and consumer hire agreements entered into before April 2014 is determined primarily by reference to the regulatory status of such agreements under the regime for the regulation of consumer credit before the transfer of regulatory oversight to the FCA in April 2014, whereas the regulatory status of loans entered into from April 2014 onwards is determined by reference to the relevant legislation as currently in force.