Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, whether consumer credit firms and peer-to-peer platforms located outside the UK but within the European Economic Area will (a) need to be authorised or supervised by the Financial Conduct Authority and (b) continue to be able to lend money online to UK consumers under the terms of the EU Electronic Commerce Directive.

In general, firms which are established outside the UK and which carry on a regulated activity in the UK require permission from the Financial Conduct Authority (FCA) and come under FCA supervision.

Consumer credit firms and peer-to-peer platforms which are established outside the UK but within the European Economic Area (EEA) may only provide services in the UK without permission from the FCA if they do so as an ‘information society services’ (ISS) under the Electronic Commerce Directive. This means that the firm must be operating exclusively online and have no physical presence in the UK.

The Government has announced that it intends to give the FCA new powers to take action against credit firms trying to abuse its rights under the E-Commerce Directive to avoid FCA regulation.