Companies wanting to continue offering credit will be administered by the Financial Conduct Authority instead of the Office of Fair Trading.
The move in administration from the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA) affects companies that have a credit licence, with the move taking place officially on 1 April 2014, according to the FCA.
The FCA states that the move is “part of the government’s programme of regulatory reform for financial services”, with the conduct of business regulation now “under a single financial services regulator”. The move has taken place because the government believes the FCA “will be better equipped to tackle consumer detriment and malpractice”, with “stronger powers and resources to protect consumers and promote effective competition in the consumer credit market”.
The UK government also believes that the FCA “will be able to respond more quickly and flexibly to market changes, ensuring that regulation can keep pace with this diverse and innovative market”. Businesses can register for “interim permission” from the FCA from now until 31 March 2014, but will have to apply for full permission “if they wish to carry on regulated credit activities” after the deadline. Those registering before 30 November can receive a 30 percent fee discount.
After the deadline in April, businesses who have not applied for interim permission will need to complete a “more detailed” application process for authorisation, which the FCA will confirm the timing of “in due course” as well as “details about what this will involve”, with authorisation said to be its equivalent of the OFT’s licensing system.