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Clifford Chance

Clifford Chance


Woolard Review – Conclusions and Impact on Regulation in the UK "Buy-Now-Pay-Later" Industry

3 February 2021

In Q4 2020, the Financial Conduct Authority in the United Kingdom (the "FCA") instructed Christopher Woolard (former interim Chief Executive of the FCA) to carry out a review into the unsecured consumer credit market, with a particular focus on the "buy-now-pay-later" ("BNPL") market (the "Woolard Review"). Currently, the majority of BNPL lending is carried out on an unregulated basis in reliance on an exemption under Art. 60F(2) of the FSMA (Regulated Activities) Order 2001 (the "RAO"), on the basis that (i) the agreements are borrower-lender-supplier agreements for fixed-sum credit; (ii) the number of payments made by borrowers is less that 12; (iii) those payments are made within a period of 12 months or less; and (iv) the credit is provided without interest or other charges. Accordingly, a number of the major BNPL providers in the UK are not regulated by the FCA, as their lending falls within this RAO exemption.

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