Unrestricted Getting FCA authorised 1

Unrestricted MarchAprilMayJuneJulyAugustSeptember 2 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

Unrestricted 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 3

Unrestricted Our approach 4 FCA approach Gateway is key High minimum standards Getting inside your business Flexible for different size firms

Unrestricted The journey for your firm 5 OFT regulation FCA interim permission FCA application FCA authorisation

Unrestricted Step 1 6 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

Unrestricted 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’ 7

Unrestricted Step 2: How to decide your permission level 8 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

Unrestricted 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 9

Unrestricted 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 10

Unrestricted 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 11

Unrestricted 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 12

Unrestricted 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 13

Application fee breakdown 14

Unrestricted 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 15

Unrestricted 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 permissiondecision tool –full permission checklist and limited permission checklist to run through what firms will need to preparefull permission checklistlimited permission checklist –jargon buster helpful to explain some of the terms we usejargon buster –plus videos and FAQs on using the online application form Look out for s 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! 16