Paragraph 4C Operating an electronic system in relation to lendingF1

Where the F2conditions in sub-paragraphs (2), (2A) and (2C) are satisfied, operating an electronic system which enables the operator (“A”) to facilitate persons (“B” and “C”) becoming the lender and borrower under a paragraph 4C agreement is a controlled activity.

The condition F3in this sub-paragraph is that the system operated by A is capable of determining which agreements should be made available to each of B and C (whether in accordance with general instructions provided to A by B or C or otherwise).

The condition in this sub-paragraph is that A, or another person (“X”) acting under an arrangement with A or at A’s direction, undertakes to—

For the purposes of sub-paragraph (2A)—

The condition in this sub-paragraph is that A, or another person (“X”) acting under an arrangement with A or at A’s direction, undertakes to perform, or A undertakes to appoint or direct another person to perform, either or both of the following—

Where A carries on the activity specified by sub-paragraph (1), it is a controlled activity for A to operate an electronic system where—

The following are controlled activities if carried on by A in the course of, or in connection with, the carrying on by A of the activity specified by F8sub-paragraph (1) F9or (2D)—

A “paragraph 4C agreement” is an agreement by which one person provides another person with credit and in relation to which—

The condition in this sub-paragraph is that A does not provide credit, assume the rights (by assignment or operation of law) of a person who provided credit, or receive credit under the agreement.

The condition in this F20sub-paragraph is that the lender is an individual or relevant person.

The condition in this F21sub-paragraph is that the borrower is an individual or relevant person and—

Paragraphs (5) and (6) of article 60C of the Regulated Activities Order (exempt agreements: exemptions relating to nature of agreement) apply for the purposes of paragraph (6)(b).

It is immaterial for the purposes of this paragraph whether the lender is carrying on a regulated activity.

In this paragraph—

• “assignment”, in relation to Scotland, means assignation;

• “borrower” means a person who receives credit under a paragraph 4C agreement or a person to whom the rights and duties of a borrower under such an agreement have passed by assignment or operation of law;

• “credit” has the meaning given by article 60L of the Regulated Activities Order;

• “lender” means—

  1. (a)

     a person providing credit under a paragraph 4C agreement, or

  2. (b)

     a person who by assignment or operation of law has assumed the rights of a person who provided credit under such an agreement;

• “relevant person” means—

  1. (a)

     a partnership consisting of two or three persons not all of whom are bodies corporate, or

  2. (b)

     an unincorporated body of persons which does not consist entirely of bodies corporate and is not a partnership.

For the purposes of the application of section 21(9) and (10) of the Act (restrictions on financial promotion) to an activity of a kind specified by this paragraph, paragraph 26D of this Schedule (relevant credit agreements), and article 4 (definition of controlled activities and controlled investments) in so far as it relates to that paragraph, F24have effect as if the reference to a relevant credit agreement in paragraph 26D includes a reference to a paragraph 4C agreement.