The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005

[F1Operating an electronic system in relation to lendingU.K.

4C.—(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).

[F4(2A) 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 [F5either interest or capital or both] due under the agreement from C, and

(b)make payments in respect of [F6either 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.]

[F7(2D) 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 [F8sub-paragraph] (1) [F9or (2D)]—

(a)presenting or offering paragraph 4C agreements to [F10either B or C] with a view to B becoming the lender under the paragraph 4C agreement [F11or] C becoming the borrower under the paragraph 4C agreement,

(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)[F12taking steps to perform duties, or exercise or enforce] rights under a paragraph 4C agreement on behalf of the lender,

(e)[F13taking 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)[F14taking steps with a view to] ascertaining the contents of such information,

(g)[F15taking steps with a view to] securing the correction of, the omission of anything from, or the making of any other kind of modification of, such information, F16...

(h)[F17taking 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 person[F18, or

(i)giving advice in relation to the taking of any of the steps in sub-paragraphs (e) to (h)]

[F19(4) 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 [F20sub-paragraph] is that the lender is an individual or relevant person.

(6) The condition in this [F21sub-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.

[F22(9) 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;

“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.]

[F23(10) 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.]]

Textual Amendments

F1Sch. 1 paras. 4B, 4C inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (S.I. 2013/1881), arts. 1(2)(6), 17(6)(a)

F2Words in Sch. 1 para. 4C(1) substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), arts. 1(3)(4), 10(8)(b)(i)

F3Words in Sch. 1 para. 4C(2) inserted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), arts. 1(3)(4), 10(8)(b)(ii)

F4Sch. 1 paras. 4C(2A)-(2C) inserted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), arts. 1(3)(4), 10(8)(b)(iii)

F8Word in Sch. 1 para. 4C(3) substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), arts. 1(3)(4), 10(8)(b)(iv)

F20Word in Sch. 1 para. 4C(5) substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), arts. 1(3)(4), 10(8)(b)(vi)

F21Word in Sch. 1 para. 4C(6) substituted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), arts. 1(3)(4), 10(8)(b)(vii)

F23Sch. 1 para. 4C(10) inserted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), arts. 1(3)(4), 10(8)(b)(viii)