Scope of this Practice Note

There are several factors to consider when deciding whether or not a credit agreement is regulated under the regulatory framework of the Financial Services and Markets Act 2000 (fsma 2000), the Consumer Credit Act 1974 (CCA 1974) and subordinate legislation and rules. There are a large number of detailed exemptions which are contained in the Financial Services and Markets Act (Regulated Activities) Order 2001, SI 2001/544 (RAO). The exemptions apply depending on the type of consumer credit agreement and its main features. It is, therefore, important to understand how to recognise the different types of consumer credit agreements.

This Practice Note defines what is meant by ‘credit’ and ‘regulated credit agreement’ and explains the scope of the RAO and CCA 1974 with regard to the type of credit agreements that fall within regulation.

Meaning of credit under the CCA 1974 and the RAO

In order for the consumer credit regime to apply to a particular transaction it must relate to credit. CCA 1974, s 9(1) and RAO,