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FCA advises unregulated firms against authorisation applications

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  • 09/06/2017
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FCA advises unregulated firms against authorisation applications
The Financial Conduct Authority (FCA) is advising bridging lenders that don’t currently offer regulated loans not to apply for authorisation, it has been revealed.

Writing for Specialist Lending Solutions earlier this week, Jonathan Sealey, managing director of Hope Capital, said:

“At the moment, the FCA actively does not want to regulate lenders or loans that it does not have to.  Unregulated lenders, such as Hope Capital, who have approached the FCA have been told that there is absolutely no point applying to be regulated if the lending being done is not of regulated loans.”

Sealey said this demonstrated that regulated loans were not superior to unregulated loans, but simply ‘a different type of lending on a different type of property for a different end user’.

He added: “With Brexit negotiations taking the focus of both government and the regulator, the regulation of commercially-focused bridging loans is unlikely to be considered for at least two or three years to come. As a result expect the number of regulated bridging loans to plateau until the regulation changes again.”

A spokesman for the FCA confirmed this is the case.

He said: “Firms should only apply to us for activities caught within our remit. If a firm applies for something that isn’t, we will reject the application.”

He also pointed out that when a firm sends an application it is accompanied by a fee which is not refundable, adding “so it is in the firm’s interest to ensure the application is correct”.

 

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