Credicorp
FSMA Regulated Activities Order plain English: what it means for business borrowers
A plain-English guide to the FSMA Regulated Activities Order (RAO), Article 60B and Article 60L, and why a company borrower sits outside UK consumer-credit regulation.
A surprising amount of how borrowing is regulated in the United Kingdom comes down to one piece of secondary legislation with an intimidating name. It is the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, usually shortened to the FSMA RAO 2001, or simply "the RAO". For all its formality, the idea behind it is simple, and it is worth understanding because it explains exactly where our own lending sits relative to the consumer-credit rules. This article translates the relevant parts into plain English.
What the RAO is for
The Financial Services and Markets Act 2000 (FSMA) is the main law governing financial services in the UK. FSMA says that certain "regulated activities" can only be carried on by firms that are authorised. But FSMA itself does not list those activities in detail — it leaves that job to secondary legislation. The RAO is that legislation. It is, in effect, the list that says: these specific activities are regulated, and anyone doing them needs authorisation.
So the RAO is the rulebook that draws the boundary — the "perimeter" — between activities the Financial Conduct Authority (FCA) regulates and those it does not. If an activity is described in the RAO, it is inside the perimeter. If it is not, it is outside.
Article 60B and the activity of lending
Consumer credit was brought into the RAO in 2014. The central provision for lending is Article 60B, which describes the regulated activity of entering into, or administering, a regulated credit agreement. In other words, Article 60B is the part that says: lending under a regulated credit agreement is a regulated activity.
That raises the obvious question — what is a "regulated credit agreement"? For that, you have to read Article 60B together with the definitions that support it.
The Article 60L definition of credit
Article 60L is the interpretation provision. It defines the key terms used in this part of the RAO, including "credit" and, crucially, who the borrower is. The framework is built around a credit agreement between a lender and an individual — the kind of borrower the consumer-credit regime is designed to protect.
This is the hinge on which everything turns. A limited company, or a limited liability partnership, is not an individual. It is a separate legal person in its own right — a body corporate. When the borrower is a body corporate, the agreement does not fit the definition of a regulated credit agreement that Article 60B is concerned with. The lending therefore falls outside the consumer-credit activity, and outside that part of the FCA's perimeter.
The honest way to describe this is not as a clever exemption but as a question of scope: the consumer regime applies to individuals, and a company borrower was never inside it. We deliberately avoid calling our position a "Consumer Credit Act exemption", because that phrasing gets the law backwards. The accurate statement is that this is the consumer regime, and our business lending sits outside it.
Why this matters for a company borrower
Because our lending to a body corporate sits outside the Article 60B activity, the consumer-credit protections that flow from it do not apply. This product is not covered by the Financial Ombudsman Service, the Financial Services Compensation Scheme or the Business Banking Resolution Service. After our internal complaints process, the final escalation is the courts. We are not FCA-authorised for consumer-credit lending, and we do not pretend to be.
None of that means a company is left without recourse. Contract law, data-protection law, and the duty to act fairly and honestly all still apply, and we hold ourselves to additional voluntary standards described on our transparency page. But the RAO sets the formal boundary, and on the correct side of that boundary, the consumer rulebook is simply not the one that governs this product.
Reading further
If you would like the practical version of this distinction, with examples of what falls inside and outside the consumer rules, see our guide to regulated versus unregulated business loans. To verify who we are as a company, you can check the public register entry for company number 16093826 on the Companies House register. The RAO is dry reading, but its logic is clear: Article 60B and Article 60L define a consumer activity, and lending to a company sits outside it.
Common questions about the FSMA RAO and business lending regulation
Is a business loan regulated by the FCA in the UK?
It depends on who is borrowing. Lending to an individual (including a sole trader) under a regulated credit agreement is an FCA-regulated activity. Lending to a limited company or LLP — a body corporate — falls outside the consumer-credit definition in Article 60B of the FSMA Regulated Activities Order 2001, and is therefore not an FCA-regulated activity. Credicorp lends only to limited companies and LLPs for business purposes; this product is not consumer credit and is not regulated by the FCA.
What is Article 60B of the FSMA RAO?
Article 60B of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 describes the regulated activity of entering into, or administering, a regulated credit agreement. It is the provision that brings consumer credit within the FCA's regulatory perimeter. A lending arrangement with a body corporate (limited company or LLP) does not meet the Article 60B definition, so it sits outside FCA consumer-credit regulation.
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