The purpose of this page is to make sure that the application process is fully understood.
This section sets out:
- What a Non-Credit Institution is and what this regulated activity would allow you to do
- Authorisation Process
- Capital Requirements
- Additional Information
What is a Non-Credit Institution and what would this regulated activity allow you to do?
A Non-Credit Institution is a natural or legal person who grants or promises to grant credit agreements, which are secured either by a mortgage or by another comparable security on residential immovable property.
The authorisation of Non-Credit Institutions falls within the scope of the Financial Services Act 2019 and the Mortgage Credit Directive 2014/17/EU. A Non-Credit Institution permission allows an institution to carry out mortgage credit activities and advisory services.
Applicants should submit an application pack with all relevant documents. We will not consider an application complete if there are any outstanding documents.
The application pack must consist of:
- Application Fee;
- Application Form;
- Financial Projections for the next 3 years;
- Stress Test on Financial Projections;
- Profit and Loss account;
- Balance Sheet;
- Regulated Individual Form (for each Regulated Individual);
- Non-Executive Director Form (for each non-executive director);
- Controller Form (for each Controller);
- Business Plan;
- Risk methodology and/or threat assessment matrix;
- Mapping assessment of how the application meets the relevant legislative threshold requirements (i.e. statutory/regulatory criteria for licensing under relevant Act); and
- Any other document the applicant considers the GFSC should take into consideration as part of the application.
Please request cloud access via E-mail at email@example.com in order to submit the Application Pack. Please include the following information in the subject field: ‘Name of Regulated Firm/Applicant – Application’. Paper copies are not required unless indicated by the Authorisation team.
Please note that we accept signed signature copies sent via e-mail and electronic signatures, which must originate from the Regulated Firm /Applicant’s domain.
A Non-Credit Institution is required to hold an initial and ongoing capital of:
- £100,000 plus a sum equal to any excess payable under its professional indemnity insurance; or
- the sum of
- its credit risk capital requirement (calculated in accordance with the Capital Requirements Directive IV (2013/36/EU) and Capital Requirements Regulation (575/2013))
- 1% of its total assets, total undrawn commitments and total unreleased amounts under mortgage credit agreements less its intangible assets plus any loan entered into, securitisation position originated or fund position entered into by the institution; and
- a sum equal to any excess payable under its professional indemnity insurance.
The business plan should comprehensively set out:
- What services the firm intends to carry out and how it proposes to conduct the activity;
- Board structure including and terms of reference for the board and senior management, details of any sub-committees set up by the Board to assist it to carry out its duties;
- The firm’s risk management function;
- An assessment of the main risks facing the firm and how these are to be mitigated;
- The resources that are to be made available and the systems that the applicant intends to employ;
- Target market;
- How clients will be sourced;
- How records will be maintained;
- How, and by whom, any significant decisions will be made;
- Structure charts outlining both in-house and outsourced operations;
- Details of outsourcing arrangements and how the firm will monitor and oversee these, including the controls implemented by the firm on these arrangements;
- If the company forms part of a larger group, details should also be provided of the activities of the group and a description of its structure;
- Details of the key internal processes and policies that will be in place, to include but not limited to:
- General systems and internal controls including details of management information systems to be employed;
- Explanations of reporting lines and segregation of duties;
- The liquidity/solvency policies;
- The credit and concentration risk policies;
- An outline of how the firm will identify connected exposures.
- Policy in respect of related party transactions;
- The process to be implemented to manage bad and doubtful debt;
- Remuneration policies;
- Details of the compliance and risk management arrangements;
- Internal audit processes;
- Outline of complaint handling procedures;
- The AML/CFT procedures to be put in place;
- Confirmation of accounting systems to be employed;
- Record keeping measures;
- Business continuity arrangements;
- Terms of reference for the board and each of the Committees to be established both at board level and senior management level; and
- Conflicts of interest policy.
Applicants should ensure that the business plan is coherent with the firm's risk appetite and capacity.