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The British Insurance Brokers’ Association has received confirmation from the Financial Conduct Authority that its members will need to actively seek to have the permission allowing them to advise on the new regulated activity of peer-to-peer (P2P) lending removed, if they do not intend to carry on this activity.
HM Treasury made legislation on 16th March 2016 that, among other things, created the new regulated activity of ‘advising on P2P agreements’ in order to allow firms to include the new Innovative Finance ISA within an ISA tax wrapper. The new legislation contains a provision that broadly means that firms which currently hold permission for the regulated activity of ‘advising on investments’ (article 53 of the Regulated Activities Order) will automatically have their permissions varied to add the new regulated activity of ‘advising on P2P agreements’ with effect from 6th April 2016.
The legislation effectively captures the general insurance mediation sector of which there are roughly 5,600 regulated firms according to the FCA’s own data, that will, in the main, have the ‘advising on investments’ permission, but limited to the investment type of ‘non-investment insurance contracts’. Even though P2P is not and never will be, part of the activity of a general insurance broker, all of these firms will need to apply to the FCA to have the permission removed.
In order to help, however, the FCA is not applying its full variation of permissions approach to firms that do not wish to retain the new article 53(2) permission to provide advice on article 36H agreements. Firms should complete the short form which is available by clicking here and the FCA will look to process the application within 15 working days.
Members should be aware that this method of submission is only available until 6th October 2016, from which point they will be directed to apply through the Connect system.
Care needs to be taken so as not to remove the ‘advising on investments’ permission entirely, as firms will still need it in relation to non-investment insurance contracts.
BIBA members’ compliance and regulation queries should be directed to: compliance@biba.org.uk
The post BIBA members need to take action to have new P2P lending permission disapplied appeared first on British Insurance Brokers' Association.
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