Following the prorogation of Parliament, the Parliament’s website has been updated to say the Creditworthiness Assessment Bill 2017-2019 failed to complete its passage through Parliament before the end of the session. The Bill will therefore make no further progress through Parliament.
Court of Appeal decides a principal is not responsible for things done by an appointed representative beyond the scope of its authority
On 31 July 2019, the Court of Appeal handed down judgment in Anderson & Others v Sense Network Limited [2019] EWCA Civ 1395 on an important issue: whether a principal is responsible for things done by an appointed representative outside of the scope of the things the principal accepted responsibility for.
After hearing submissions, Lord Justice David Richards decided that the appointed representative agreement restricted the appointed representative “to business using a Company Agency”. Because the advice given to clients did not involve the use of a Company Agency, it fell outside of the business the principal accepted responsibility for.
The principal was therefore not responsible for the advice given by the appointed representative. The appeal, and the claim, was therefore dismissed.
FCA publishes new webpage on the conversion of individuals from the approved persons regime into the corresponding senior management functions under the SMCR
On 11 October 2019, the UK Financial Conduct Authority published a new webpage explaining the process of converting individuals under the current approved persons regime into corresponding senior management functions under the Senior Managers and Certification Regime.
Individuals wishing to convert must do so by filing a Form K with the FCA no later than 23:59 on 24 November 2019.
FCA publishes new webpages for change of control notifications
On 14 October 2019, the UK Financial Conduct Authority published two new webpages to help firms making change of control notifications under Section 178 of the Financial Services and Markets Act 2000:
– a new webpage on submitting a change of control notification (see: https://www.fca.org.uk/firms/change-control/submit-change-control-notification); and
– a new webpage on the change of control forms (see: https://www.fca.org.uk/firms/change-control/change-control-notification-forms).
No need for P2P lending platform to disclose individual lenders’ names for court proceedings
On 6 September 2019, the High Court handed judgment in Milne v Open Access Finance Limited [2019] EWHC 2517 (Ch) following the customer’s application for disclosure of the names of each of the 612 individual lenders who had (at various stages) entered into credit agreements with him using the peer2peer lending platform provided by Open Access Finance Limited (the Platform Provider).
Mr Milne sought disclosure of the lenders’ names so he could bring a claim against them alleging (a) breaches of statutory duty under Section 138D of the Financial Services and Markets Act 2000 and (b) an unfair relationship within the meaning of Section 140A to 140C of the Consumer Credit Act 1974.
The Court refused to order the Platform Provider disclose the individual lenders‘ names. Instead, it made a representative order under Rule 19.6 of the Civil Procedure Rules 1998 appointing the the Platform Provider as the representative defendant.
Butterworths Financial Regulation Service – updated commentary on CONC published
Issue 107 of Butterworths Financial Regulation Service has now been published. This includes updated material in chapters 1 to 4, 14 and 15 (dealing with CONC 1, 2, 3, 13 and 14) written by Russell Kelsall.
In addition to reviewing the existing commentary, Issue 107 includes new commentary on:
– the FCA’s review of the retained provisions;
– CONC 2.11 (which was introduced on 1 October 2018 and deals with renumeration and performance management policies, procedures and practices);
– the Advertising Standards Authority’s recent increased interest in financial promotions for credit;
– the FCA’s views on the meaning of “enforcement” and the High Court’s decision in McGuffick v Royal Bank of Scotland plc [2009] EWHC 2386 (Comm).
We plan to review the remaining commentary, and publish new commentary, in Issue 108.
FCA publishes new webpage reminding firms to register on Connect before January 2020
On 13 September 2019, the FCA published a new webpage reminding firms to register on Connect before the compulsory deadline of January 2020. Firms are encouraged to do so sooner rather than later.
FCA publishes further information on extension of SMCR to solo regulated firms
On 11 September 2019, the UK Financial Conduct Authority published extra information on a webpage for firms only regulated by the FCA on the extension of the Senior Manager and Certification Regime.
The webpage includes extra information about Form K. This is the form that must be submitted by firms to the FCA no later than 11:59pm on 24 November 2019 to convert an approved person to a senior management function.
From 9 December 2019, the SMCR regime will apply to firms only regulated by the FCA.
US Consumer Financial Protection Bureau Director suggests consumer education is key
It’s never a bad idea to keep an eye out for what’s happening in other jurisdictions. In the United States of America, the Consumer Financial Protection Bureau (or CFPB) has a relatively newly-installed director, Kathy Kraninger. One of her plans to help tackle the consumer finance industry in the US is to improve consumer education (a topic which has fairly limited traction, it seems, with the UK Financial Conduct Authority).
For an interesting take on this approach by The Hill, the following article is well worth a read: https://thehill.com/opinion/finance/460384-cpfb-head-misguided-in-reliance-on-consumer-education
Final notice given to Interest Free Loans Limited refusing its application for authorisation (and provides a useful insight of the FCA’s expectations when making an application)
The UK Financial Conduct Authority has published a final notice given on 10 July 2019 to Interest Free Loans Limited refusing its application for permission to (amongst other things) enter into a regulated credit agreement for high-cost short-term credit as lender.
The final notice gives a useful insight into the FCA’s approach when considering an application for authorisation for credit-related regulated activities. For example, it lists the documents sought from the applicant (see paragraph 22) and the kind of information the FCA expects to see in policy and procedure documents (see paragraph 28).