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The FCA and Consumer Credit Licences

22nd February 2016 3 Comments

A FTSE250 Company Secretary writes...

In one small area of our business (amounting to less than 1% of our Group turnover) we are caught by the Consumer Credit Act and are required to hold a Consumer Credit Licence.  Since the responsibility for consumer credit passed from the OFT to the FCA we have been operating under an interim licence and had to apply for the full consumer credit licence in June 2015.  The process has been arduous to say the least and the FCA are now requesting additional information, namely that we complete an Approved Person application for each of our parent company directors (the Company applying for the licence).  The information required to complete the form includes previous address history for three years, employment records for five years (name of employer, nature of business, responsibilities of role), biographical information and a Fitness Propriety questionnaire running to seven pages.   We have already completed the Approved Person form for our Chief Executive and believe that the submission of these forms for our remaining executive directors plus our non-executive directors is excessive given that our application should be fairly straightforward.

We would be interested to hear your experiences of dealing with the FCA and Consumer Credit Licence applications and whether you have been able to push back on the request for such detailed information, particularly regarding non-executive directors.

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Comments

  1. FTSE250 said

    24th February 2016 at 4:10 pm

    I can confirm that for us the process was protracted. Fortunately, our plc was not involved in the application: hence information required to be given was at a subsidiary level and not potentially price sensitive.

    • FTSE SMALL CAP said

      22nd February 2016 at 5:10 pm

      I have had some experience of this, but didn’t need to negotiate with the FCA as the CCL was held by a subsidiary with only a few directors (and no NEDs) so it was not a huge burden, although rather a pain) to provide the information. The bigger picture being that the group carried out various FCA regulated activities, so we would not want to “rock the boat” with them anyway.

      I may be wrong, but “FCA regulatory admin requirements” and “FCA will be pragmatic and take a view” are not phrases that in my experience tend to appear in the same sentence.

      • FTSE250 said

        22nd February 2016 at 3:59 pm

        The process is an arduous one and the FCA exhibits little flexibility in its application, treating major PLCs in the same way as small owner managed businesses. Having provided the director details that you’re being asked for, we were then required to also deliver confidential management accounts and forecasts. Despite protestations regarding confidentiality and potential price sensitivity, the FCA was not prepared to move on these requirements. I wonder whether there is then a level of rigour applied to the analysis of this information, or whether it is the mere provision that ‘ticks the box’. Either way, we found there was no choice but to comply.

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