A draft of the amending legislation, FSMA 2000 (Regulated Activities) (Amendment Order) 2016 has been published and can be found here: http://www.legislation.gov.uk/ukdsi/2016/9780111143254/pdfs/ukdsi_9780111143254_en.pdf.
There are a few principles amendments which will be noted relating primarily to the regulation of activities relating to peer-to-peer lending, mortgage lending and other credit granted to consumers.
Firstly, amendments have been made to extend the scope of peer to peer lending platforms and the provision of advice through these platforms. Ultimately it appears that these amendments will align the regulation of peer to peer lending alongside other ISA qualifying investments. Now, the provision on advice to lenders entering into a peer to peer loan will come within the scope of a regulated activity. Additionally, the scope of regulated activity has extended to lending and transfer of rights i.e. the regulated activity of operating an electronic system in relation to lending has been extended such that when a person (incl. person acting under instructions) operates an electronic system and collects only interest or capital due (or both) under the agreement, it will still be a regulated activity. Additionally, where a person is carrying on that activity to facilitate another person transferring their rights under an agreement to a third person, this will also be a regulated activity.
The provisions also supplement the UK transposition of the Mortgage Credit Directive. The definition of a “regulated mortgage contract” has been supplemented to include that mortgage contract agreements entered into before 21 March 2016 will be considered regulated if they were regulated when entered into or if they were regulated credit agreements which are now becoming regulated mortgage contracts pursuant to the Mortgages Order 2015.
The regulatory status of consumer credit agreements and consumer hire agreements has been clarified and will now be determined in relation to the regulatory status of such agreements under the regime for the regulation of consumer credit in place at that time. For agreements entered into from April 2014 onwards, the regulatory status is determined by reference to the relevant legislation currently in force. This amendment has been made to ensure a common understanding of the types of agreements being transferred from being regulated as consumer credit agreements to being regulated as mortgage contract on 21 March 2016.
The different provisions on the order will officially come into force at different times but the most part being in March 2016 and any remaining provisions in April 2016.
Should you require any further advice or information on the above, Cleveland & Co, your external in-house counsel, are here to help.