Unrestricted Getting FCA authorised 1. Unrestricted MarchAprilMayJuneJulyAugustSeptember 2 FCA Credit Regulation: the story so far 50,000 OFT licenceholders.

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Getting FCA authorised

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March April May June July August September

FCA Credit Regulation: the story so far

50,000 OFT licenceholders

apply for interim permission to

continue trading

FCA takes on

consumer credit

regulation

Wider FCA Handbook comes into force –

Threshold Conditions (COND); Principles for

Business (PRIN); Senior Management

Systems and Controls (SYSC); Dispute

Resolution (DISP)

New rulebook – CONC – comes into force on 1

April 2014

Business Plan announces thematic reviews of High Cost Short Term Credit and Debt

Management, a market study of Credit Cards and proactive supervision of Overdrafts

New HCSTC limits on rollovers and CPAs

come into force

Consultation on HCSTC price cap

Proactive firm visits begin, starting with Debt Management and Home Collected Credit

Scrutiny of consumer credit Financial Promotions begins

Authorisations application period for Principals

FCA publishes research on

Logbook Lenders and calls on the industry to clean

up its act

FCA publishes fees for 2014/15

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A new regulator, a new relationship

• Our expectation: firms should be compliant with all of our standards from 1 April and should have been adhering to OFT guidance before that

• Want to see genuine commitment to running a compliant business, with customer interests at its heart

• Firms that don’t seriously engage now with our standards won’t make it through authorisation

• Principle 11 – a different mode of engagement• Expect an open dialogue with firms - notify us when

things go wrong, and tell us how you’re going to fix it

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Our approach

FCA approach

Gateway is key

High minimum standards

Getting inside your business

Flexible for different size firms

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The journey for your firm

OFT regulation

FCA interim permission

FCA application

FCA authorisation

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Step 1

Now• If you want to

start offering consumer credit

Your application

period

• If you have interim permission

• If you miss this date, you will need to stop regulated credit activities

When to apply

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The difference between a permission and the consumer credit licence (CCL)• There’s no longer a licence, and no longer categories A,

B, C etc

• Your authorisation application is a fresh start and is unrelated to your CCL

• You apply for ‘Part 4A permission’: and have to choose full or limited permission

• You choice is based on the regulated activities you carry out (i.e. the type of business) :– Some activities mean you have to choose ‘full permission’ – Some activities will allow you to qualify for ‘limited permission’

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Step 2: How to decide your permission level

1• Look at what credit business

your firm does

2• See how it matches FCA

‘regulated activities’

3• Check whether those activities

mean full or limited permission

Pawnbroking will require Full permission

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Step 3: Prepare your application

• You will need to give us detailed information about your business

• You may need to prepare your supporting information now even if you plan to apply in several months’ time

• You should review our website to see what we will ask you to include, then start collating the information now

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Examples of what we will ask for

• Basic information about your firm• How your firm is set up, who works there• Who owns or influences your business

(controllers)• How you make your money (business plan)• How you make sure your business keeps to

our rules (compliance monitoring)• Financial information• Your firm’s history and any ‘significant

events’ we should know about

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Approved persons

• Our approach is to ensure senior management responsibility

• Having ‘approved persons’ is a key way to achieve this

• Senior individuals in your firm will need to apply to be your approved person, and prove they are fit and proper

• We will hold the person accountable

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Step 4: Apply

• Most firms apply using our Connect online system

• We have help text within Connect and guidance forms you can download on our website

• You may need to send in a paper form if you are already regulated by us for other things

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How much it costs to apply

• You will need to pay an application fee when you apply

• Your fee will be a calculation based on how complex we think your application is and your consumer credit income

• We have put all firms into different complexity categories based on what you do:– Limited permission– Straightforward: eg credit broker– Moderately complex: eg, lender– Complex: eg debt management company

Your credit income

Limited perm-ission

Straight-forward

Moderatelycomplex

Complex

Up to £50,000 £100 £600 £800 £1,000

£50-£100,000 £500 £750 £1,000 £1,250

£100-£250,000 £500 £1,000 £1,500 £2,000

£250,000-£1 m £500 £1,500 £5,000 £7,000

over £1 million £500 £5,000 £10,000 £15,000

Application fee breakdown

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• All authorised firms will appear on our register• Our enforcement team will seek out firms that

carry on credit business without permission

Ensuring a level-playing field

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Get Credit Ready• Lots of information to help you on the FCA website,

including: – decision tool to help firms work out whether they are

limited or full permission– full permission checklist and limited permission checklist to

run through what firms will need to prepare– jargon buster helpful to explain some of the terms we use– plus videos and FAQs on using the online application form

• Look out for emails with further information and your invite to participate in a webinar and ask questions directly.

• Change your details on fca.org.uk (search for “CCI”)• FCA stand here today – come and see us!