Legislation – The Financial Services and Markets Act 2000 (Regulated Activities) (Coronavirus) (Amendment) Order 2020

This Order amends the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) (the “RAO”) and makes supplemental provision in respect of the amendments.

Section 19 of the Financial Services and Markets Act 2000 prohibits a person who is not authorised or exempt from carrying on any regulated activity in the United Kingdom. Contravention of that prohibition is a criminal offence. Entering into a regulated credit activity as lender is generally a specified activity for the purposes of section 22(1) of that Act.

This Order amends article 60C of the RAO to create a new type of exempt agreement. This amendment provides that a credit agreement is an exempt agreement where a lender provides a borrower with credit of £25,000 or less for the purposes of a business carried on, or intended to be carried on, by the borrower and where the agreement is entered into under the Bounce Back Loan Scheme (“the BBLS”) operated by the British Business Bank.

This Order amends article 39H of the RAO to provide that where a lender carries out the activity of debt-collecting in relation to a BBLS loan the activity is not excluded from the activity specified in article 39F. The effect is that where a lender carries out the activity of debt collecting in relation to BBLS loans, the activity is a specified activity.

This Order also provides a transitional provision whereby a lender who enters into a loan under the BBLS and who had permission under Part 4A of FSMA to carry out the activity in debt collecting in accordance with article 60B(2) of the RAO, will, from the date this Order comes into force, continue to have permission to carry out that regulated activity, but in accordance with article 39F(1) of the RAO.

An explanatory memorandum is available with this Order on www.legislation.gov.uk.

An impact assessment has not been produced for this Order.