CCA Licensing Update

As we have previously highlighted, the regulation of CCA licences has now transferred from the OFT to the Financial Conduct Authority (FCA).  The “go live” date was Tuesday 1 April.  If you have a licence, wish to retain this, but do not yet have FCA interim permission then you must cease your regulated activities and instead contact the FCA who will help you through the process of what to do next.  Otherwise, if you continue those activities, you are likely to be faced with enforcement action where the FCA has wide ranging powers.

Alternatively, if you held an OFT license but are no longer conducting relevant business, you should let the FCA know.

Let’s assume you are continuing your relevant business, and do have interim permission.  Is that the end of the process?  By contrast to a light touch OFT approach, the answer is most definitely no!

All licence holders with interim permission will next have to secure full authorisation.  The FCA has just published their timetable, showing when each of the different categories of licence holders will need to start the full authorisation process: see the Direction to Firms on the FCA website (note that the FCA refers to all businesses as ‘Firms’).  Education institutions are not in a priority sector and therefore your timetable will commence somewhere between 1 October 2014 and 31 March 2016.  The FCA should notify your exact date by 15 May 2014; and once this is “triggered” you will have three months to complete the relevant form.  This process is going to be much more time-consuming than the interim permission stage.

The full authorisation application will involve the payment of a fee. The figure will depend upon the level of your consumer credit income and the complexity of your business: typically, between £600 and £5,000.  In addition, there will be an annual fee for each year the institution is authorised.

At least one individual will need to be approved by the FCA as part of the full authorisation process. This will be the person or
people responsible for ensuring that the institution delivers its prescribed duties and responsibilities, including compliance with the FCA’s Principles for Businesses and the Consumer Credit Sourcebook (“CONC”). This will incorporate the training of relevant staff, and the compilation and delivery of product data.

Once authorisation is obtained, all licensed businesses will be supervised by the FCA.  For most institutions, that is likely to involve dealing with a sector team who will look after your general area rather than having specific FCA points of contact.

Richard Ellison
Partner, Disputes Resolution Group
For and on behalf of SGH Martineau LLP
DD: 0800 763 1414
M:  1414
F: 0800 763 1001
International DD: +44 870 763 1414

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