Q&As

An individual is proposing to loan £500,000 to a residential developer secured by a legal charge over one of the plots. A company solely owned by the individual is also proposing to make a loan of the same amount secured by a charge over a plot in similar fashion. Is either charge affected or restricted in any way by legislation relating consumer credit or regulated mortgage contracts?

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Published on LexisPSL on 25/10/2017

The following Financial Services Q&A provides comprehensive and up to date legal information covering:

  • An individual is proposing to loan £500,000 to a residential developer secured by a legal charge over one of the plots. A company solely owned by the individual is also proposing to make a loan of the same amount secured by a charge over a plot in similar fashion. Is either charge affected or restricted in any way by legislation relating consumer credit or regulated mortgage contracts?

Under the general prohibition contained in section 19 of the Financial Services and Markets Act 2000, a person cannot carry out a regulated activity, or purport to carry out a regulated activity, in the UK unless they are either:

  1. an authorised person, or

  2. an exempt person

An activity is a regulated activity if it is:

  1. an activity of a specified kind which is carried on by way of business, and

  2. relates to a specified investment or property of any kind

For more information about carrying on regulated activities in the UK by way of business, see Practice Notes:

  1. What are regulated activities?

  2. What does 'by way of business' mean?

  3. Territorial scope of the general prohibition

As you can see from Practice Note: What are regulated activities?, there are regulated activities contained in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO), SI 2001/544 related to regulated mortgage contract

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