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Getting FCA authorised
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FCA Credit Regulation: the story so far
March
April
50,000 OFT
licenceholders apply
for interim
permission to
continue trading
May
FCA takes
on
consumer
credit
regulation
Business Plan announces thematic reviews of
High Cost Short Term Credit and Debt
Management, a market study of Credit Cards
and proactive supervision of Overdrafts
July
August
September
Scrutiny of consumer credit Financial Promotions begins
New HCSTC limits on
rollovers and CPAs
come into force
New rulebook –
CONC – comes
into force on 1
April 2014
Wider FCA Handbook
comes into force –
Threshold Conditions
(COND); Principles for
Business (PRIN);
Senior Management
Systems and Controls
(SYSC); Dispute
Resolution (DISP)
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June
Consultation on HCSTC price cap
Proactive firm visits begin, starting with Debt Management and Home Collected Credit
Authorisations application period for Principals
FCA publishes
research on
Logbook Lenders
and calls on the
industry to clean
up its act
FCA publishes fees
for 2014/15
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A new regulator, a new relationship
•
•
•
•
•
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Our expectation: firms should be compliant with all of
our standards from 1 April and should have been
adhering to OFT guidance before that
Want to see genuine commitment to running a
compliant business, with customer interests at its heart
Firms that don’t seriously engage now with our
standards won’t make it through authorisation
Principle 11 – a different mode of engagement
Expect an open dialogue with firms - notify us when
things go wrong, and tell us how you’re going to fix it
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Our approach
Gateway is
key
Flexible for
different
size firms
FCA
approach
Getting
inside your
business
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High
minimum
standards
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The journey for your firm
OFT
regulation
FCA interim
permission
FCA
application
FCA
authorisation
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Step 1
Now
• If you want to
start offering
consumer credit
When
to
apply
Your
application
period
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• If you have interim
permission
• If you miss this
date, you will need
to stop regulated
credit activities
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The difference between a permission
and the consumer credit licence (CCL)
• There’s no longer a licence, and no longer categories A,
B, C etc
• Your authorisation application is a fresh start and is
unrelated to your CCL
• You apply for ‘Part 4A permission’: and have to choose
full or limited permission
• You choice is based on the regulated activities you carry
out (i.e. the type of business) :
– Some activities mean you have to choose ‘full permission’
– Some activities will allow you to qualify for ‘limited permission’
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Step 2: How to decide your permission
level
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1
• Look at what credit business
your firm does
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• See how it matches FCA
‘regulated activities’
3
• Check whether those activities
mean full or limited permission
Pawnbroking
will require Full
permission
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Step 3: Prepare your application
• You will need to give us detailed information
about your business
• You may need to prepare your supporting
information now even if you plan to apply in
several months’ time
• You should review our website to see what we
will ask you to include, then start collating the
information now
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Examples of what we will ask for
• Basic information about your firm
• How your firm is set up, who works there
• Who owns or influences your business
(controllers)
• How you make your money (business plan)
• How you make sure your business keeps to
our rules (compliance monitoring)
• Financial information
• Your firm’s history and any ‘significant
events’ we should know about
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Approved persons
• Our approach is to ensure senior
management responsibility
• Having ‘approved persons’ is a key way to
achieve this
• Senior individuals in your firm will need to
apply to be your approved person, and
prove they are fit and proper
• We will hold the person accountable
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Step 4: Apply
• Most firms apply using our Connect
online system
• We have help text within Connect and
guidance forms you can download on
our website
• You may need to send in a paper form if
you are already regulated by us for
other things
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How much it costs to apply
• You will need to pay an application fee
when you apply
• Your fee will be a calculation based on how
complex we think your application is and
your consumer credit income
• We have put all firms into different
complexity categories based on what you
do:
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–
–
–
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Limited permission
Straightforward: eg credit broker
Moderately complex: eg, lender
Complex: eg debt management company
Application fee breakdown
Your credit
income
Limited
permission
Straightforward
Moderately
complex
Complex
Up to £50,000
£100
£600
£800
£1,000
£50-£100,000
£500
£750
£1,000
£1,250
£100-£250,000
£500
£1,000
£1,500
£2,000
£250,000-£1 m
£500
£1,500
£5,000
£7,000
over £1 million
£500
£5,000
£10,000
£15,000
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Ensuring a level-playing field
• All authorised firms will appear on our register
• Our enforcement team will seek out firms that
carry on credit business without permission
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Get Credit Ready
• Lots of information to help you on the FCA website,
including:
– decision tool to help firms work out whether they are
limited or full permission
– full permission checklist and limited permission checklist
to run through what firms will need to prepare
– jargon buster helpful to explain some of the terms we use
– plus videos and FAQs on using the online application form
• Look out for emails with further information and
your invite to participate in a webinar and ask
questions directly.
• Change your details on fca.org.uk (search for “CCI”)
• FCA stand here today – come and see us!
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