SCHEDULE 1
PART IControlled Activities
F7Operating an electronic system in relation to lending4C
1
Where the F2conditions in sub-paragraphs (2), (2A) and (2C) are satisfied, operating an electronic system which enables the operator (“A”) to facilitate persons (“B” and “C”) becoming the lender and borrower under a paragraph 4C agreement is a controlled activity.
2
The condition F3in this sub-paragraph is that the system operated by A is capable of determining which agreements should be made available to each of B and C (whether in accordance with general instructions provided to A by B or C or otherwise).
F12A
The condition in this sub-paragraph is that A, or another person (“X”) acting under an arrangement with A or at A’s direction, undertakes to—
a
receive payments in respect of F9either interest or capital or both due under the agreement from C, and
b
make payments in respect of F10either interest or capital or both due under the agreement to B.
2B
For the purposes of sub-paragraph (2A)—
a
an agreement by A to appoint X to perform the activities in that paragraph is to be treated as an undertaking by A within the meaning of that sub-paragraph;
b
it is immaterial that—
i
payments may be subject to conditions;
ii
A, or X, may be entitled to retain a portion or the entirety of any payment received from C.
2C
The condition in this sub-paragraph is that A, or another person (“X”) acting under an arrangement with A or at A’s direction, undertakes to perform, or A undertakes to appoint or direct another person to perform, either or both of the following—
a
to take steps to procure the payment of a debt under the agreement;
b
to exercise or enforce rights under the agreement on behalf of B.
F112D
Where A carries on the activity specified by sub-paragraph (1), it is a controlled activity for A to operate an electronic system where—
a
that system enables A to facilitate a person (“B”) assuming the rights of the lender under a paragraph 4C agreement by assignment or operation of law, and
b
the conditions in sub-paragraphs (2), (2A) and (2C) are satisfied where C is the borrower under the agreement in paragraph (a).
3
The following are controlled activities if carried on by A in the course of, or in connection with, the carrying on by A of the activity specified by F4sub-paragraph (1) F12or (2D)—
a
b
furnishing information relevant to the financial standing of a person (“Y”) with a view to assisting in the determination as to whether another person should—
i
enter into, as the lender, a paragraph 4C agreement with Y, or
ii
assume the rights of the lender under a paragraph 4C agreement under which Y is the borrower,
c
taking steps to procure the payment of a debt due under a paragraph 4C agreement,
d
F15taking steps to perform duties, or exercise or enforce rights under a paragraph 4C agreement on behalf of the lender,
e
F16taking steps with a view to ascertaining whether a credit information agency (within the meaning given by article 89A(6)) holds information relevant to the financial standing of an individual or relevant person,
f
F17taking steps with a view to ascertaining the contents of such information,
g
h
F19taking steps with a view to securing that a credit information agency which holds such information—
i
stops holding the information, or
ii
does not provide it to any other personF21, or
i
giving advice in relation to the taking of any of the steps in sub-paragraphs (e) to (h)
F224
A “paragraph 4C agreement” is an agreement by which one person provides another person with credit and in relation to which—
a
the condition in sub-paragraph (4A) is satisfied, and
b
the condition in either sub-paragraph (5) or (6) is satisfied, or was satisfied at the time the agreement was entered into.
4A
The condition in this sub-paragraph is that A does not provide credit, assume the rights (by assignment or operation of law) of a person who provided credit, or receive credit under the agreement.
5
The condition in this F5sub-paragraph is that the lender is an individual or relevant person.
6
The condition in this F6sub-paragraph is that the borrower is an individual or relevant person and—
a
the lender provides the borrower with credit less than or equal to £25,000, or
b
the agreement is not entered into by the borrower wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by the borrower.
7
Paragraphs (5) and (6) of article 60C of the Regulated Activities Order (exempt agreements: exemptions relating to nature of agreement) apply for the purposes of paragraph (6)(b).
8
It is immaterial for the purposes of this paragraph whether the lender is carrying on a regulated activity.
F239
In this paragraph—
“assignment”, in relation to Scotland, means assignation;
“borrower” means a person who receives credit under a paragraph 4C agreement or a person to whom the rights and duties of a borrower under such an agreement have passed by assignment or operation of law;
“credit” has the meaning given by article 60L of the Regulated Activities Order;
“lender” means—
- a
a person providing credit under a paragraph 4C agreement, or
- b
a person who by assignment or operation of law has assumed the rights of a person who provided credit under such an agreement;
- a
“relevant person” means—
- a
a partnership consisting of two or three persons not all of whom are bodies corporate, or
- b
an unincorporated body of persons which does not consist entirely of bodies corporate and is not a partnership.
- a
F810
For the purposes of the application of section 21(9) and (10) of the Act (restrictions on financial promotion) to an activity of a kind specified by this paragraph, paragraph 26D of this Schedule (relevant credit agreements), and article 4 (definition of controlled activities and controlled investments) in so far as it relates to that paragraph, F24have effect as if the reference to a relevant credit agreement in paragraph 26D includes a reference to a paragraph 4C agreement.