Edition 4 of this Briefing contained a Feature setting out some key, practical information on the new UK financial regulatory regime under the Financial Services Act 2012. As mentioned in that Feature, responsibility for oversight of the consumer credit regulatory regime will be transferred from the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA) on 1 April 2014. The FCA has now published some helpful information on its plans for overseeing the consumer credit regime as well as detailed proposals outlining how the existing, often complex, consumer credit legislation (mainly contained in the Consumer Credit Act and a large raft of secondary legislation) will be 'designated' to form a new Consumer Credit Sourcebook (CONC) in the FCA Handbook.
In practical terms regarding consumer credit licences under the regime (including for UK SPVs holding/seeking a consumer credit licence (which is typically obtained for precautionary purposes) where the receivables to be securitised fall within the UK consumer credit regime), the procedure will be as follows (according to information provided to date by the FCA):
- Existing consumer credit licences will lapse on 31 March 2014;
- Entities wishing to hold a licence after 31 March 2014 will need to be registered with the FCA. From 2 September 2013, existing licence-holders can register with the FCA for "interim permission" to carry on regulated activities as from 1 April 2014 (they must register in order to obtain interim permission to allow them to carry on regulated consumer credit activities post 1 April 2014);
- After 1 April 2014, the FCA will begin considering whether to grant previous OFT consumer credit licence-holders full authorisation. This process will be completed and the interim permission period will end on 1 April 2016;
- All consumer credit licence-holders with an interim permission that wish to carry on providing regulated consumer credit activities will need to be authorised by the FCA by 1 April 2016. Interim permission holders will have to apply for full authorisation (or variation of permission) by a date yet to be set by the FCA (likely to be during the fourth quarter of 2014 at the earliest). All applicants for authorisation new to the industry from 1 April 2014 will have to apply for full authorisation from that date; and
- Current consumer credit licence application fees are £1,466 (comprised of a £1326 consumer credit licensing fee and a £140 "CCJ levy" that is a contribution to help fund the Financial Ombudsman Service). We have not seen any information to indicate that the fee levels will be adjusted post 1 April 2014.
The FCA's final rules for the consumer credit regulatory regime will be published in a Policy Statement in February 2014.
FCA Interim Permissions website