The following Practice Compliance guidance note provides comprehensive and up to date legal information covering:
This Practice Note explains how the SRA’s consumer credit regime operates from 1 April 2016 following amendments to the SRA Financial Services (Scope) Rules 2001. It takes into account the SRA's Consumer credit toolkit, published on 22 December 2015.
Before 1 April 2014:
consumer credit activities (including entering into consumer credit agreements) were regulated by the Office of Fair Trading (OFT)
law firms had the benefit of a group licence for consumer credit work which was issued by the OFT to the SRA and therefore didn't need an individual licence to enter into consumer credit agreements with clients or engage in ancillary consumer credit activities
On 1 April 2014, the Financial Conduct Authority (FCA) took over regulation of consumer credit work and the SRA's group consumer credit licence disappeared, meaning law firms lost the benefit of the group licence for all consumer credit activities.
On the same day, the SRA amended the SRA Financial Services (Scope) Rules 2001 to pull consumer credit activities into the existing Exempt Professional Firms (EPF) regime. You can therefore undertake consumer credit activities under the EPF regime (ie without being licensed by the FCA), so long as:FSMA 2000, ss 326–327
you register on the FCA’s EPF register, and
those activities are incidental to your professional services
The SRA Financial Services (Scope) Rules 2001 have been amended by extending rule 3.1 and replacing rule 5.11(a)—with effect from 1 April 2015. This is to prohibit firms from carrying on the following consumer credit activities under the EPF regime:SRA Financial Services (Scope) Rules 2001, r 3.1
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