Treasury has made the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2016, amending the 2001 Regulated Activities Order (RAO). The changes:
- extend the scope of the regulated activities of arranging and advising on regulated mortgage contracts (RMCs) so that mortgages entered into before 31 October 2004 and which are regulated as consumer credit agreements before 21 March 2016 are included within the activities from that date. First charge mortgages of that type can continue to be regulated as consumer credit agreements during a transitional period;
- amend the regulated activity of operating an electronic system (a P2P lending platform) in relation to lending so that a person will carry it on regardless of whether they are operating the system (or a person acting on instructions), collecting the interest or capital due under the agreement or both. Where a person is carrying on that activity, facilitating another person transferring their rights under an agreement to a third person is also a regulated activity;
- amend the regulated activity of advising on investments to include (a) giving advice to a lender or potential lender on the merits of entering into, or assuming rights under, a relevant agreement through a P2P lending platform; (b) providing instructions to the operator of such a system; (c) enforcing or exercising such a lender’s rights; and (d) assigning rights under such an agreement;
- clarify the regulatory position of a consumer credit or consumer hire agreement entered into before 1 April 2014 such that it is clear that the regulatory position is determined primarily by reference to the position when the agreement was entered into; and
- clarify that agreements entered into before 21 March 2016 will only be RMCs if they were regulated as such when entered into, or if they were regulated credit agreements which are becoming RMCs because of the order that implemented the MCD.
It also amends the Small and Medium Sized Business (Finance Platforms) Regulations 2015 so that finance applications made by brokers are out of scope of those regulations. Other amendments relate to the position of local authorities and are consequential on the major changes. The provisions relating to FCA rules, guidance and directions came into force on 17 March, whilst others came into force on 20 or 21 March, and the rest will come into force on 6 April. (Source: Treasury makes consumer lending order and explanatory memorandum)