NFDA NEWS
28 March 2013
Dear Colleague
Ahead of the Easter Break, this week we are giving you
some reminders of recent news, legislative changes
and updates on some of our activities.
‘We represent, you
benefit’
In addition, this week the BIS Select Committee has
launched an inquiry into the retail sector which we will
be responding to. It aims to examine the state of the
UK high street and concerns facing UK retailers. We
will be submitting a response (due April 15). The
inquiry also examines the impact of online sales and
direct selling on retailers and it would be good to get
an idea of these practices and effects on the retail
motor trade. This is an opportunity for retailers to call
on Government to address the big issues facing their
businesses. We would like to hear from you on any
issues you may have.
Wishing you a Happy Easter.
Sue Robinson, Director
Tel: 0207 307 3422
Email: [email protected]
Twitter: @NFDASueRobinson
NFDA WORKING GROUP UPDATES
F&I
The NFDA F & I Working Group have met again this month to agree new work streams. The
main focus will be on consumer credit and its move from the OFT to the new FCA.
Aftersales
The NFDA Aftersales Working Group met this month to discuss the formulation of an
Aftersales Standard specifically for franchised dealers. The Standard will be not be onerous
for dealers and in many respects will reflect what manufacturers already demand of their
dealers. Once the Standard has been approved by the NFDA National Executive Committee
we will be circulating our proposals to the wider membership for their feedback.
Used Car
The NFDA Used Car Working Group met this month to finalise the Used Car Standard that
has been under development for some time. The meeting will also discussed the auction
grading scheme that has recently been developed.
TRANSFER OF CONSUMER CREDIT FROM THE OFFICE OF FAIR TRADING (OFT)
TO THE FINANCIAL CONDUCT AUTHORITY (FCA)
The Government have announced that Consumer Credit Regulation will be transferred from
the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA) on 1 April 2014.
The Government hope the move will not only allow more joined up regulation by placing
consumer credit and general insurance regulation and oversight in one place, but will also
lead to a more flexible and reactive regime that puts consumer protection first.
The Financial Conduct Authority (FCA)
On 1 April 2013 the new Financial Conduct Authority will be established taking on the retail
financial services responsibility of the Financial Services Authority (FSA). The overreaching
strategy of the FCA will be to ensure the financial services market functions effectively
giving consumers competitive products and high levels of protection. By doing this it is
hoped that the financial system in the UK will increase its integrity. The FCA regime is
expected to be tougher and more proactive in tackling consumer detriment.
An FSMA Style Regime
With the move to the FCA there will be some major changes to the way consumer credit is
regulated. This will particularly be the case as the regime will move from falling under the
Consumer Credit Act (CCA) to one under the Financial Services and Markets Act (FSMA).
The current CCA regime that the OFT operates is very much based on the legislation in the
Act. It is also a very light touch regime that relies heavily on consumer complaints for
enforcement. In contrast, the new FCA regime will be similar to the current FSA one for
general insurance that operates under the FSMA. This is based on a rulebook and is more
hands on with authorised firms required to submit reports and with FSA having a suite of
powers for enforcement. The FSA rulebook will transferred to the FCA with only minor
changes and will be enforced in a similar way. All firms will be expected to comply with the
FCA Principles of Business rules and depending on the size of the business, some or all of the
relevant Threshold Conditions, although capital requirements will not be required for
consumer credit firms.
The Government have acknowledged that the new regime is likely to increase costs for
businesses. However, it is developing a two tier system with a lighter touch regime for
smaller firms who sell consumer credit as a secondary activity. The fees for these firms will
also be lower than for firms requiring full authorisation. It is also anticipated that the
requirements on businesses to comply with the regime will be proportionate to the size and
type of firm and the products they sell.
Transition Period
Although firms will be regulated by the FCA from 1 April 2014 there will be a transition
period operating until 1 April 2016. Those firms already authorised under the FSA will be
moved across to the FCA and will need to apply by 31 March 2014 for ‘interim variation of
permission’ for those activities they currently operate under a Consumer Credit Licence
through the OFT. This is anticipated to be carried out under the existing FSA system for
applying for authorisation variations.
For firms who are not FSA authorised they will need to inform the FCA by 31 March 2014
that they wish to continue providing credit. The process for doing this is expected to be
streamlined with firms needing to provide minimum information and pay a small fee. These
firms will then be issued with ‘interim permission’ to sell credit. Firms will be informed in
due course when they will be able to apply for these permissions. It is anticipated that firms
will be able to do so sometime from the Autumn of 2013. Firms who do not inform the FCA
they wish to carry on providing credit by the deadline will not be able to legally sell credit
from 1 April 2014.
Between April 2014 and April 2016 firms will be contacted to apply for full authorisation
under the FCA. It is anticipated that the process will occur in blocks. At this stage it is
unclear whether the blocks will be based on the size of a business, its activities, the sector it
operates in, or purely in alphabetical order. If a firm during the transition period needs to
change the permission categories it holds on its licence it will have to apply for full
authorisation to do so at that point.
Authorisation
There will be two tiers of FCA authorisation:Tier 1 for ‘high risk’ firms – these firms will need to comply with the full credit regime
including FCA threshold conditions.
Tier 2 for ‘low risk’ firms – this is intended for firms seen as low risk and that do not sell
finance as their main activity such as retailers. It is likely that some of the retail motor
sector will qualify for this group but we need more information before we will be able to
confirm this. Threshold conditions will be streamlined for these firms and fees will be set at
a lower level.
Appointed Representatives (AR)
As is the case with the current insurance regime there will be an option for businesses to
become appointed representatives of a principle firm. The principle accepts regulatory
responsibility for the AR. AR’s allow smaller firms to operate without the full regulatory
burden and would not need to apply for FCA authorisation.
Unlike the current AR regime firms will be able to be a mixture of FCA fully authorised and
an AR. This will allow firms who would prefer to be fully authorised for credit but remain
an AR for insurance to do so. A situation that is likely to be the case within the retail motor
sector where many firms have become AR’s to sell insurance.
DVLA UPDATE
Progress to close the regional DVLA offices goes on at pace. To be able to handle the
closures in October/November of this year, the DVLA will be ceasing to supply tax discs to
dealers on the AFRL system from June.
From July all new vehicle registrations on the AFRL system will have the road tax disc
distributed direct from Swansea. This process is running at least 3 months in advance of the
closure of regional offices to be assured that the system works. During the Autumn period
many other services such as vehicle class changes (Motability to private tax) will be
transferred to the Post Office and later in the year so will cherished transfers.
Dealers acquiring their AFRL tax discs direct from Swansea will now have the choice to have
the tax disc sent to the registered keeper, the dealership premises or the fleet operator.
The legislation is also being changed to allow new vehicles to be put on the road without tax
discs for the first 14 days after date of registration. There will also be a permanent advance
registration system on AFRL allowing dealers to tax vehicles up to 14 days in advance of the
registration date, thereby having tax discs at the dealership at the time of the vehicles
collection. Any further information please contact Stephen Latham on 07515 975157 or
email [email protected]
MAZDA 6 RECALLS
The newly launched Mazda6 is the subject of a recall affecting 502 diesel models and 165ps
Sport petrol models in the UK and up to 15,000 cars globally.
The recall is "a precautionary measure", said Mazda.
The recall will deal with a potential fault with a component in the DC/DC convertor that is
located under the front passenger seat. The component is there to suppress electrical
interference with the radio.
The convertor will be replaced free of charge.
A Mazda spokesman said: "The likelihood of there being a fault is very small so this recall is a
precautionary measure. But where there is a fault it may cause overheating of the unit and
in a worst case scenario, a fire may result.
"For all customers who are awaiting delivery of their new Mazda6 these cars will have the
modification made before delivery which, in the short term, may result in a slight delay. All
customers will be contacted by their dealer to update on the expected delivery date."
Source: AM
BELFAST DATE FOR REGIONAL MEETING
The NFDA is holding a regional meeting for its Northern Ireland members. We will be
discussing market conditions, updating members on our lobbying activities and advising
members on some of the forthcoming legislation changes.
The meeting will be held on Thursday 20 June at the Culloden Hotel, Belfast. If you would
like to attend please contact Louise Woods on 01788 538332 or email
[email protected]
NFDA AUTUMN BALL – SAVE THE DATE – SATURDAY 5 OCTOBER
THE GROVE, CHANDLER’S CROSS
Enjoy good food, good wine, good company, good fun and entertainment !