Authorisation under the FCA
The FCA should by now have sent you your landing slots for authorisation. Some are as early as 1st June 2014! Below are a number of things to consider for your applications.
Application – All Consumer Credit Firms previously regulated by the OFT should now have their Authorisation slot. If you are a short-term high cost credit lender, your slot will be from 1 December 2014 to 28 February 2015. You therefore only have less than 6 months to prepare for your application.
Underwriting – This will need to be shown in your business plan. Martin Wheatley has already said that Business Plans will be unacceptable if they show that short-term high cost credit lenders do not make a profit in the first loan.
Training – How do you train your staff? Do you record it? Do you have an ongoing training system? Are your employees treating customers fairly?
HR – COND. 2.5.6 (15) States that: “the firm has developed human resources policies and procedures that are reasonably designed to ensure that it employs only individuals who are honest and committed to high standards of integrity in the conduct of their activities.” Does your firm?
Overseas – If you run a Consumer Credit Business in the UK your “Mind and Management” should also be here – will this cause you problems with your structure? Remember that this affects businesses within the EU as well as further afield. See “What is Mind and Management”.
Risk and Reporting – Are you already recording data for GABRIEL purposes? If you feel you are taking an acceptable risk with an element of your business are you documenting the same?
Integrity – Principle 1 of PRIN states that firm’s must conduct their business with Integrity. Are you confident that your staff act within your guidelines? Do you audit them, listen to telephone calls or do you Mystery Shop them?
Software – Is your software provider on the ball? If the FCA were to tell you to make changes within a short timescale or stop trading, could they do it? Are you confident in their processes? Remember, if they process your payments and don’t do this in line with CONC. It is Your Licence that is at risk. Is your IT fit for purpose?
Approved Persons – Have you chosen your Approved Persons? Are they “Fit and Proper” to carry out controlled functions? Are they honest, competent have relevant experience and are financially sound? See “Who will be Your Approved Persons?”
Threshold Conditions – Location and Mind and Management have already been referred to but the FCA applies this to being able to “Effectively Supervise” you. This includes having the correct legal status, the Appropriate Resources to run your type of business alongside your Management’s Suitability to have both the customer and FCA’s interests at the heart of your business.
Information – Are your ICO registrations up-to-date? Do you use ICO material in training?
Organisational Chart – Do you have your Organisational Chart in place, can you show that management and owners have the requisite competency and experience to run your business? Remember that this requires you to prove that all the people on this chart are able to perform the role and are trained and managed effectively.
Non-compliance – The FCA reiterates many times that non-compliance is not an option. They will, and have already, enforce breaches from 1 April 2014.
AUTHORISATION – Now is the time to write your business plans, ensure that your Policies are in place, chose your Approved Persons and Authorised Representatives and ensure that you are collecting data for reporting. ALPH L&C are ideally placed to assist with all of your Business and Compliance Needs.