Background

Cast your mind back to 2015 when the FSA, as the FCA was then called, required that all motor dealers who offered finance to register with them, as consumer credit lending is deemed a higher risk activity.

Remember how easy they made it? It is also highly likely you have not heard from them since.

When there is such a low level of attention paid, it is easy to assume that this is a low priority concern for the regulating authority.

The FCA are now keen to show that is not the case, and are paying much closer attention to motor dealers, who they now regard as “low hanging fruit” for enforcement, as far as fulfilling their obligations under their FCA authorisation.

FCA change of direction

Prior to Covid, the FCA had started to pay closer attention to motor dealers and was cancelling the permissions of around 10 dealers per month, saying “This is a clear message to motor dealers that the FCA have teeth and are reviewing dealer’s activities”.

It must be noted that often these cases are the consequences of a dealer not having given their FCA authorisation the attention required.

Typically, this centres around the twice yearly filing of a RegData return to the FCA, which can, on the face of it, appear excessively complex.

Now that things appear to be getting back to normal as Covid recedes in the rear-view mirror, the FCA are once again ramping up their attention to motor dealers, so it is timely for them to pay closer attention to the requirements of their FCA authorisation.

Potential consequences

The risks of losing your FCA authorisation should not be underestimated.

Firstly, it removes the ability to offer consumer credit, meaning it is not possible to sell vehicles on finance, which effectively limits the business to just cash sales.

In addition, if there was a stocking facility with a finance house, this will have been withdrawn as well, with the inability to access stocking facilities and immediately having repay any stocking loans in place.

Both consequences can be an existential threat to a business.

How to ready your business

Dealing with the FCA, in our experience, is a one-sided relationship – they call the shots and it is up to you to provide whatever information they require, by the date they set.

They like to see that an authorised entity is open and transparent in their dealing with the FCA, and a lot of this depends on the regularity of providing required information.

Reporting is commonly mentioned as the biggest problem area in dealing with the FCA – the bi-annual RegData returns are not simple and can take the most prepared people days to compile and complete.

It can be difficult to see how you get on top of these filing requirements and this can be compounded by not having your staff on board with what needs to be done?

How can MyRegData help?

You can quickly get your FCA reporting in order with MyRegData which will streamline your FCA reporting using your existing accounting data.

The software is a cloud solution, so there is no installation, registration, or updates to worry about – simply got to www.motorregdata.co.uk on your device, login and you are up and running.

If you already have accounting software and do not wish to change, there is no need to (although you may be surprised at how much you can save by switching your bookkeeping to MyRegData) and we will show you how to obtain the required information from your software.

If you are still using spreadsheets or a paper-based system, MyRegData is an easy way to digitize your accounting, as well as making your RegData filings simpler.

Importantly, the service includes time with an expert to help you assemble and prepare the RegData information for filing. Two half hour sessions are included in the price, and additional time can be purchased should you think you need it.

Call Shauna on 0161 413 5054 and she will take you through the software in 15 minutes and answer any questions you might have.