111 days to the new regulatory changes in the consumer credit world. Are you ready?

‘Transfer day’ is fast approaching in the world of consumer credit regulation in the UK.  From 12 December 2013, there are only 111 days until the Financial Conduct Authority (FCA) takes over The Office of Fair Trading’s (OFT) role of regulating the consumer credit market. This change will take place on 1 April 2014.

In the last six months there has been a flurry of activity by the FCA to inform, educate, promote and answer questions regarding the new change.  In summary, the FCA’s Consultation Paper (CP 13/10) in October 2013 was published (submissions were due by 3 December 2013); the FCA held roadshows nationwide in November 2013 and new information was posted on the FCA’s website.  Furthermore, people may have attended industry briefings or attended the LexisNexis’annual Consumer Credit Conference (which was held on 4 December 2013) where Nadege Genetay (Head of Banking, Lending & Protection Department in the Policy Risk and Research Division at the FCA) was a guest panel speaker to keep up to date. Please click here to LexisNexis Comet (Commercial.Enterprise.Technology) Blog to find out about the ‘Top 10 Things You Need to Know’ from this conference!

Once authorised by the FCA, firms will be in a new arena of regulation as the following requirement will apply:

  • Approved persons requirements
  • Prudential standards for debt management firms
  • Client assets for debt management firms (including client asset operational oversight function approved person)
  • Requirements relating to controllers
  • Periodic reporting
  • Complaints reporting and publication rules

What are the key dates for 2014 and beyond?

Key dates What firms need to do?
Early 2014 Firms with interim permissions will need to look out for announcements by the FCA (starting in autumn 2014) of when it must apply for full authorisation.
Feb/March 2014 Feedback from the Consultation Paper CP 13/10 is expected to be published in regards to regulated crowd funding, including the lending/investment aspects of peer-to-peer lending.  Firms will need to analysis the responses and amend any business process. 
March 2014 Review any publication of Policy Statement setting out final rules and guidance.
March 2014 Firms will need to review its budget forecasting to cover the FCA’s fees.  The FCA is due to publish its Fees: proposals for periodic fee rates for 2014/15.
1 April 2014 ‘Transfer day’ – the FCA takes over regulation of consumer credit from the OFT, firms will need to be familiar with:

  • the FCA’s Consumer Credit sourcebook (CONC) where the rules come into force
  • the forms to apply for full authorisation
  • the FCA’s paper on key risks in market and priorities for intervention.
1 October 2014 Reporting Requirements comes into effect and the 6 months transitional period comes to an end.
1 April 2016 All firms to be fully authorised.
By 2019 The FCA to undertake review of retained provisions of the Consumer Credit Act 1974 (as amended).

 

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