Although firms will have to wait until later in autumn 2013 for full details, it looks likely that some form of rebate will be offered to consumer credit licence holders who now need to apply for interim permission from the Financial Conduct Authority (FCA). The Government made this announcement after consulting with both the FCA and the existing consumer credit regulator the Office of Fair Trading (OFT).
Many credit firms were angered by the FCA’s initial announcement that all those applying for FCA authorisation would need to pay the full authorisation fee, even if they had already paid for an indefinite consumer credit licence.
The statement on the FCA website says that “There will be a programme of rebates to consumer credit licence holders to reflect the closure of the OFT regime at 31 March 2014. This is designed to ensure that the cost of the transfer of regulation is proportionate.”
The move has been supported by a number of industry trade bodies.
Chris Hannant, director general of the Association of Professional Advisers, said: “We’re pleased the FCA has announced this programme of rebates, which is good news for advisers.”
Robert Sinclair, chief executive of the Association of Mortgage Intermediaries, commented: “We are grateful that the government recognised the issues raised and will offer rebates to those firms that have already incurred the substantial cost of obtaining a new consumer credit license since 2008. These broker firms should not be unfairly disadvantaged because of unforeseen changes to the regulatory architecture.”
The FCA has also confirmed that those who apply for interim permission before the end of November 2012 will receive a 30% discount on their application fee, so firms will only need to pay £245 instead of £350, while sole traders will pay £105 instead of £150. Those who submit their applications between December 1 2013 and the switchover date of April 1 2014 can expect to pay the full fee.
Kingston Independent Financial Advisers company secretary Sam Caunt was less enthusiastic about the announcement. “Thirty per cent is inadequate but a clear admission of responsibility,” was his reaction.
This illustrates that the best time to apply for interim permission is now. There will inevitably be a large number of applications submitted shortly before the final deadline, and now it seems there will also be a rush to get applications in during November of this year.
The FCA has taken out advertisements in many newspapers highlighting the need for credit firms to obtain authorisation. These advertisements mention that the application process via the FCA website takes only a few minutes.