FCA Statement Addresses Regulation of Firms Under Recovery Loan Scheme
FCA published a statement on its approach to regulating firms in relation to the Recovery Loan Scheme of the government. In the statement, FCA explains that most of the lending available as part of the Recovery Loan Scheme will not be a regulated activity. Therefore, most lending applications will be outside the regulatory perimeter of FCA while FCA rules will apply as usual to the regulated lending under the scheme—in this case regulated asset finance; this includes rules on creditworthiness assessments (CONC 5.2A). However, the relevant requirements under the Money Laundering Regulations will continue to apply, with lenders expected to undertake appropriate anti-money laundering and fraud checks on the Recovery Loan Scheme applications.
The Recovery Loan Scheme was launched by the government-owned British Business Bank on April 06, 2021, to provide financial support to UK businesses in light of the COVID-19 disruption. While the Recovery Loan Scheme has different terms and eligibility criteria, it has replaced the Bounce Back Loan Scheme (BBLS) and Coronavirus Business Interruption Loan Scheme (CBILS) of the government. Both the CBILS and BBLS were closed to new applications on March 31, 2021.
Related Link: Statement
Keywords: Europe, UK, Banking, COVID-19, Recovery Loan Scheme, Credit Risk, CBILS, BBLS, FCA
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