Last week the FCA released a consultation (CP24/19) which aims to increase the level of detail received from consumer credit firms. At present a typical secondary credit broker will provide six pieces of data to the FCA on annual basis within the Consumer Credit (CCR007) report. The latest consultation, in a long line of increased data reporting requirements implemented by the FCA across the whole sector, sets out to scratch beneath the surface and understand a firm’s regulated activity in more detail.
In the main, this is a welcomed change given the very little information currently held by the regulator for credit brokers. However it will require all firms affected to review the data they currently hold regarding their activity and ensure they are ready to meet the reporting details when it is implemented. Given the data led supervision strategy the FCA has implemented in other sectors, it is unlikely that there will be any wholesale changes to the consultation, albeit a few minor amendments in relation to the practical application of the reporting.
What are the new reporting requirements?
The proposed new returns will include five mandatory sections of questions for all firms in scope. These relate to:
- Permissions – regarding the regulated activities firms have undertaken in the past 12 months;
- Business model – regarding the financial products, goods, and/or services that firms are providing;
- Marketing – regarding the channels firms are using to target consumers;
- Revenue – total revenue from credit-related activities and non-credit related activities; and
- Employees – regarding the number of employees and their incentive and remuneration arrangements.
The proposed reports will then ask for information specific to a firm’s regulated activity. As an example there will be different questions for motor finance brokers compared to retail finance brokers.
Whilst the new reporting is in consultation stage, it is advisable that firms begin to assess any changes required to how they capture details of their regulated activity to ensure the relevant information is to hand in readiness for implementation.
For those firms which wish to contribute to the consultation, the deadline is the 31st October 2024 with a Policy statement expected in Spring 2025.
