With interim permissions with the Financial Conduct Authority now open for registration, Karen Wagstaffe of Finance Cover & Training sorts through the process of application, and qualification for a discount.
For anyone involved in providing credit to customers, you will have received communication from finance partners over the past month or two about the changes happening to the consumer credit licencing regime in the UK.
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Currently, consumer credit licences (CCLs) are issued by the Office of Fair Trading (OFT). As of 1 April 2014, they will be issued by the Financial Conduct Authority (FCA) and the changes will impact all businesses that currently hold a licence. And any firm holding a valid licence must apply to the FCA for what is called an "interim permission".
The interim permission gives temporary authority to a business enabling it to continue providing consumer credit services from 1 April 2014 until such time as the business’s application has been assessed fully by the FCA.
Firms holding a CCL that do not apply for interim permission will not be able to offer consumer credit services until they apply for and are granted full authorisation under the FCA.
The application itself is very easy to complete and, with the correct information to hand, should only take about 10 minutes. There are however a few simple things to do before you start your interim permission application:
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By GlobalData1. Check the information on your existing licence is correct, such as the name and trading styles of the business, for example. Any amendments or changes to your existing licence are called "a variation to your existing licence" and a fee of £80 will apply for any amendments.
2. Check also that you have the correct categories for your business needs. For example, for most automotive dealers organising and sorting out finance settlements for and on behalf of customers you may also need to ensure you have sub-category D and E assigned to your existing licence.
Note: If you don’t already hold these sub-category designations, you will need to complete what is called a Credit Competence Form (CCF1) before you apply for your interim permission. It can be quite an onerous form to complete and time should be set aside to complete this form sooner rather than later if the end-of-November date for discounts are to be met.
3. Once you have checked and confirmed your existing licence contains all the correct information and you hold the correct categories for the activities you plan to undertake, then you can register for your interim permission.
4. There are certain things you should have to hand before completing your interim permission application to help make the process easy and simple to do:
A) Your existing licence details, e.g. your OFT CCL number.
B) Existing contact details of person authorised or nominated to complete the registration.
C) Whether you are directly authorised with the FCA or not, e.g. answer ‘yes’ if you are, and ‘no’ if you are not.
D) The number of your employees likely to be involved in consumer credit activities, e.g. how many staff members will be involved with selling, advising or settling finance agreements for
customers.
E) Current finance commission, e.g. how much profit you generate from finance sales not including insurance or other add-on sales.
F) A credit card to pay the fee. There is a 30% reduction to firms who complete their interim permission before the end of November, meaning the fee is £350, reduced to £245 if done before the end of November 2013.
Should anyone need any further assistance or guidance with their existing licence or assistance with the interim permission, they can of course contact me.
Karen Wagstaffe is Training and Compliance Director at Finance Cover & Training
A step-by-step guide to applying for an interim permission is also available on the Financial Conduct Authority website:
http://www.fca.org.uk/static/fca/documents/ip-registration-step-by-step.pdf
As is detailed information on using the interim permissions system:
http://www.fca.org.uk/static/fca/documents/detailed-guidance-consumer-credit-interim-permissions%20system.pdf
