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PERG 4.2 Introduction

Requirement for authorisation or exemption

PERG 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. PERG 2.2 (Introduction) contains further guidance on these consequences.

2

Professional firms

PERG 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 PERG 4.14 (Mortgage activities carried on by professional firms)).

Questions to be considered to decide if authorisation is required

PERG 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 PERG 4.18):

  1. (1)

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

  2. (2)

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

  3. (3)

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

  4. (4)

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

  5. (4A)

    is the only available exclusion the one for CBTL firms (see PERG 4.10B (Regulation of buy to let lending))?5

  6. (5)

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

  7. (5A)

    if so, is the exclusion on which I am relying disapplied because the business is subject to the Mortgage Credit Directive (see PERG 4.10A (Activities regulated under the Mortgage Credit Directive)?4

  8. (6)

    if the answer to 4A is “no” and 5 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 PERG 4.14 (Mortgage activities carried on by professional firms))?

  9. (7)

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

  10. (8)

    if not, am I otherwise an exempt person (see PERG 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 the FCA website "Apply for authorisation": www.fca.org.uk/firms/authorisation/apply-authorisation for details of the application process2.

However, if a person wishes to carry on CBTL business see PERG 4.10B (Regulation of buy to let lending) it may be able benefit from the exclusion for CBTL firms and be placed on the relevant register described in PERG 4.10B if:5

(a) no other exclusion applies; and5

(b) the answer to questions (6) to (8) is “no”.5

Note that the person would need to apply to be included on the relevant register described in PERG 4.10B.5

PERG 4.2.4G

[deleted]3

3

Financial promotion

PERG 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 guidance 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, PERG 8 (Financial promotion and related activities)) and, in particular, to PERG 8.17 (Financial promotions concerning agreements for qualifying credit).