Medenta Risk Manager, Debbie Maddocks, offers some guidance to practices on how to ensure you’re fulfilling your obligations when it comes to offering consumer finance.
With practice life being so busy, it’s easy to get distracted or lose sight of your Financial Conduct Authority (FCA) obligations, and your contractual obligations with V12 Retail Finance and Medenta when working with consumer finance. That’s why we’re reminding you of areas you need to ensure remain up-to-date.
Members can also find this information on the Medenta R&L Hub hub.medenta.com
Your FCA authorisation
If you’re ever uncertain about your obligations as a regulated business, then the FCA website is a great source of information. There is a dedicated FCA page for consumer credit, which sets out what you need to do regarding reporting, notifying changes, paying fees and so on. It’s also where you can find guides on how to manage a regulated business. To ensure you stay up-to-date with current regulations etc. you can join their mailing list which will provide updates on any key changes as they happen.
Changes to your business
If you are thinking about making any changes to the way you run your business, there are some fundamental rules that you need to follow when it comes to your FCA authorisation or your contract with V12 Retail Finance and Medenta.
Selling your business
As the owner of a regulated business if you intend to sell, the FCA MUST be notified at the point a sale/purchase is being considered, at least 60 working days prior to the sale being completed. The primary contact should be the purchasing business, but there is an onus on both parties to ensure the FCA is informed. The 60 days allows the FCA time to object or query any change in ownership.
It’s important to note here that failure to notify the FCA is considered a criminal offence which carries the risk of unlimited fines and up to two years in prison. You can find full details on the FCA page Change in Control | FCA.
Changing your business structure
If you are considering changing from being a Sole trader to becoming a partnership or a Limited Company or changing the directors/owners of your Limited Company, you must follow the FCA requirements.
In some cases, this may simply require a notification to the FCA, however in others you will need to apply for a different form of authorisation. What’s expected of you in these circumstances is set out on the FCA page Consumer credit firms: what you need to do | FCA
Other changes
There are some changes to your FCA account that can be made through the Connect system, which is the online system for submitting applications and notifications to the FCA. You can access Connect via MyFCA:https://connect.fca.org.uk/MyFCA.
Changes in SMF (Senior Management Functions) functional holders or Approved Persons
At times not only will changes be needed to the business, but also to its authorised individuals, the above links will help you make the necessary changes. The FCA must approve an individual prior they take on a role or before the previous role holder is removed. You can find out more here. You can do this via Connect in MyFCA
Trading names
You must inform the FCA if you change your trading name or add other trading names to your business. You can do this via Connect in MyFCA Cancelling your authorisation
If for any reason, either through changes to legal entity or not wanting to work with consumer credit anymore, you wish to cancel your authorisation, you will need apply to have it cancelled. You can do this via Connect in MyFCA
Annual Checks
The FCA will ask you to complete an annual review of your FCA register, account users, and firm details. This is to ensure their records are up to date. The FCA will send you notifications when these are due. You can do this via Connect in MyFCA
Annual Reports
The FCA will expect you to complete a number of returns, providing details of your consumer credit activity over the period. You can do this via RegData in MyFCA.
Due Diligence Checks
You will be contacted by Medenta or V12 Retail Finance, on a periodic basis to carry out a due diligence review. The purpose of this is to ensure that you are compliant with your FCA obligations and contractual obligations with V12 Retail Finance and Medenta.
How do these changes impact your contracts with V12 Retail Finance and Medenta
As well as the FCA you should also be informing V12 Retail Finance and Medenta of any changes to your business. Selling your practice, changing your business structure, changing owners could affect your contract with V12 Retail Finance/Medenta.
You need to ensure that you have notified both of any proposed changes as soon as possible before completion. This is to ensure that any contract changes are completed for the correct legal entity.
This is essential as any agreements proposed after changes to your business have been completed may not be enforceable. The impact for you could be that you may be liable for any agreement issues during the term of the agreements, or any agreements that have not been drawn down, may not get paid out.
Looking at the worst-case scenario, the FCA could terminate your authorisation, or your contracts with V12 Retail Finance and Medenta could be suspended.
If for any reason you have made changes to your business and haven’t notified the FCA or V12 Retail Finance and Medenta, please get in touch urgently.
For any FCA breaches you are required to notify the FCA via a SUP15 notification form at the earliest opportunity.
I hope you find this guidance useful and please remember the Medenta team is on hand to support you with any queries. Simply email info@medenta.com or call 01691 684175
About Debbie
Debbie joined the Medenta team in 2012 with a background in financial services. Interestingly started her career (way back when) as a dental nurse, giving her an understanding of life in a dental practice, and working with the regulators.
Dog walking, 90s dance, and boxing help to keep Debbie fit in her spare time.
Where required by law, loans will be regulated by the Financial Conduct Authority and the Consumer Credit Act 1974.
Medenta Finance Limited, authorised and regulated by the Financial Conduct Authority No: 715523. Registered in Scotland, No: SC276679. Registered address: 50 Lothian Road, Festival Square, Edinburgh, EH3 9WJ. Tel: 01691 684175. Medenta act as a credit broker, not a lender and will introduce practices to V12 Retail Finance Limited for which Medenta will receive an introduction commission from Secure Trust Bank plc, V12 Retail Finance Limited’s parent company.
V12 Retail Finance Limited is authorised and regulated by the Financial Conduct Authority. Registration number: 679653. Registered office: Yorke House, Arleston Way, Solihull, B90 4LH. Correspondence address: 25-26 Neptune Court, Vanguard Way, Cardiff CF24 5PJ. V12 Retail Finance Limited act as a credit broker, not a lender, and only offers credit products from Secure Trust Bank PLC. Secure Trust Bank PLC trading as V12 Retail Finance are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registration number: 204550. Registered office: Yorke House, Arleston Way, Solihull, B90 4LH.
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