UK Financial Conduct Authority Consults on New Regulatory Reporting Return for Consumer Credit Firms

The U.K. Financial Conduct Authority has published a consultation paper on a new regulatory reporting return for consumer credit firms engaging in any one, or more, of the regulated activities of credit broking, providing credit information services, debt adjusting and debt counselling services. If introduced, the new return will replace some of the existing returns for these activities. The return will include the following five mandatory sections of questions for all firms in scope: (i) permissions – regarding the regulated activities firms have undertaken in the past 12 months; (ii) business model – regarding the financial products, goods, and/or services that firms are providing; (iii) marketing – regarding the channels firms are using to target consumers; (iv) revenue – total revenue from credit-related activities and non-credit related activities; and (v) employees – regarding the number of employees and incentive and remuneration arrangements. Firms will then be presented tailored questions specific to the relevant permissions they hold. The FCA hopes to receive more detailed, accurate, and consistent data from firms through the proposed return, as well as simplifying the experience for firms. This should enable the FCA to accurately identify how firms are using their permissions so that it can better understand which firms are engaging in activities with a higher risk of harm to consumers and how these risks are changing over time. The data will also help the FCA to identify earlier firms that aren't using their permissions and no longer require authorisation. The deadline for comments is October 31, 2024. The FCA intends to publish a final policy statement in Spring 2025. The FCA proposes that the first reporting period will cover January 1 to December 31, 2025. There will be no change to the reporting frequency for firms.

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