Content Options

Content Options

View Options

AUTH App 4.2 Introduction

Requirement for authorisation or exemption

AUTH App 4.2.1G

In most cases, any person who carries on a regulated activity in the United Kingdom by way of business must either be an authorised person or an exempt person. Otherwise, the person commits a criminal offence and certain agreements may be unenforceable. AUTH 2.2 (Introduction) contains further guidance on these consequences. In order to be authorised, a person must either:

  1. (1)

    hold a Part IV permission given by the FSA (see AUTH 1.3 (The Authorisation manual) and AUTH 3 (Applications for Part IV permission)); or

  2. (2)

    qualify for authorisation (see AUTH 5 (Qualifying for authorisation under the Act)), for example if the person is an EEA firm or a Treaty firm.

Professional firms

AUTH App 4.2.2G

Certain professional firms are allowed to carry on some regulated activities without authorisation so long as they comply with specified conditions (see AUTH App 4.14 (Mortgage activities carried on by professional firms)).

Questions to be considered to decide if authorisation is required

AUTH App 4.2.3G

A person who is concerned to know whether his proposed activities may require authorisation will need to consider the following questions (these questions are a summary of the issues to be considered and have been reproduced, in slightly fuller form, in the flowchart in AUTH App 4.18):

  1. (1)

    will I be carrying on my activities by way of business (see AUTH App 4.3.3 G (The business test))?

  2. (2)

    if so, will my activities relate to regulated mortgage contracts (see AUTH App 4.4 (What is a regulated mortgage contract?))?

  3. (3)

    if so, will I be carrying on any of the regulated mortgage activities (see AUTH App 4.5 (Arranging regulated mortgage contracts) to AUTH App 4.9 (Agreeing to carry on a regulated activity))?

  4. (4)

    if so, is there the necessary link with the United Kingdom (see AUTH App 4.11 (Link between activities and the United Kingdom))?

  5. (5)

    if so, will any or all of my activities be excluded (see AUTH App 4.5 (Arranging regulated mortgage contracts) to AUTH App 4.10 (Exclusions applying to more than one regulated activity))?

  6. (6)

    if it is not the case that all of my activities are excluded, am I a professional firm whose activities are exempted under Part XX of the Act (see AUTH App 4.14 (Mortgage activities carried on by professional firms))?

  7. (7)

    if not, am I exempt as an appointed representative (see AUTH App 4.12 (Appointed representatives))?

  8. (8)

    if not, am I otherwise an exempt person (see AUTH App 4.13 (Other exemptions))?

If a person gets as far as question (8) and the answer to that question is 'no', that person requires authorisation and should refer to AUTH 3 (Applications for Part IV permission).

AUTH App 4.2.4G

Even if the person does not require authorisation, he may still require a licence under the Consumer Credit Act 1974 to carry on the activity (see AUTH App 4.17 (Interaction with the Consumer Credit Act 1974)).

Financial promotion
AUTH App 4.2.5G

An unauthorised person who intends to carry on activities connected with mortgages will also need to comply with section 21 of the Act (Restrictions on financial promotion). This appendix does not cover financial promotions that relate to mortgages. Persons should refer to the general guidance on financial promotion in Appendix 1 to the Authorisation manual (AUTH App 1 (Financial promotion and related activities)) and, in particular, to AUTH App 1.17 (Financial promotions concerning agreements for qualifying credit).