Operating an electronic system in relation to consumer lending
Produced in partnership with Jacqui Hatfield of Orrick Herrington & Sutcliffe UK LLP
Operating an electronic system in relation to consumer lending

The following Financial Services guidance note Produced in partnership with Jacqui Hatfield of Orrick Herrington & Sutcliffe UK LLP provides comprehensive and up to date legal information covering:

  • Operating an electronic system in relation to consumer lending
  • Regulated activities—general
  • Regulated activity of operating an electronic lending system
  • What are the main elements of operating an electronic system in relation to lending?
  • Does the activity concern an article 36H agreement?
  • What does ‘business purposes’ mean?
  • Does the activity constitute operating an electronic system in relation to lending?
  • Are there any exclusions which may be of relevance?
  • What rules are applicable to firms who are authorised to operate an electronic system in relation to lending?
  • Does CONC apply?
  • more

Regulated activities—general

For an activity to constitute a regulated activity under Financial Services and Markets Act 2000 (FSMA 2000), it must be carried out 'by way of business' (see Practice Note: What does 'by way of business' mean?). According to FCA guidance, whether or not an activity is carried on by way of business will depend on several factors, including the scale of the activity, the degree of continuity, the existence of a commercial element and the nature of the particular regulated activity.

For more detail on these requirements, refer to Chapter 2 of the FCA’s Perimeter Guidance Manual (PERG and Practice Note: Regulated activities relating to consumer credit).

Regulated activity of operating an electronic lending system

This Practice Note examines the regulated activity of operating an electronic system in relation to consumer lending, including the main elements of operating an electronic system in relation to lending, the meaning of business purpose when operating an electronic system and the rules applicable to firms authorised to operate an electronic system in relation to lending. For information on the regulated activity of advising on loan-based crowdfunding agreements (that is, advising on article 36H agreements—see below), see Practice Note: Advising on basic stakeholder products, investments, pension transfers and loan-based crowdfunding agreements.

Consumer credit is regulated under the FSMA 2000 and the Financial