The Financial Services Authority welcomes the new legislation as it believes some small firms and individual investors who provide Sale and Rent Back (SRB) agreements think they do not need to be regulated because SRB is not their main source of business.
The changes make it clear that anybody who conducts SRB business – even a single transaction – must be authorised by the FSA, unless they are related to the customer. The new legislation therefore brings more consumers under the FSA’s regulatory protection.
In its latest Quarterly Consultation Paper, published last week, the FSA consulted on guidance that reflects the new legislation and will assist SRB firms by helping them understand when they need to have FSA authorisation. The consultation will be open for two months and the FSA is aiming to publish the final guidance by Christmas.
Any firms or individuals who provide SRB agreements must stop doing so immediately unless they have applied for and been given the relevant FSA permissions.
The new legislation can be found online at: