On 26 May 2021, the Financial Conduct Authority (‘FCA’) published a statement on the regulatory statement of the UK Recovery Loan Scheme (‘RLS’). The government launched the scheme in April to support UK businesses during the COVID-19 pandemic.
The FCA confirmed that most of the lending under the RLS will not be a regulated activity and will therefore fall outside of its regulatory perimeter. However, the FCA’s rules will apply to any regulated lending in the scheme such as regulated asset finance. This includes the rules on creditworthiness assessments in CONC 5.2A.
The requirements under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (SI 2017/692) (MLRs 2017) will also continue to apply. Lenders should therefore undertake the appropriate checks on applications under the scheme.