PERG 14.1 Background

1Q1. What is the purpose of these questions and answers (“Q&As”) and who should be reading them?

These Q&As are aimed at persons involved in the provision or promotion of financial arrangements involving the acquisition or disposal of land for the purpose of enabling an individual:

• to purchase a property; or
• to raise funds from the equity in a property that he already owns,

They are intended to help such persons understand whether they will, as a result of the Regulation of Financial Services (Land Transactions) Act 2005 and secondary legislation made following that Act:

• be carrying on a regulated activity and need authorisation or exemption under section 19 of the Financial Services and Markets Act 2000; or
• be subject to the restriction on financial promotions in section 21 of the Financial Services and Markets Act 2000.

The Q&As complement the general guidance on regulated activities, which is in Chapter 2 of our Perimeter Guidance Manual (PERG 2), the general guidance on regulated mortgage activities in Chapter 4 (PERG 4), the general guidance on financial promotions in Chapter 8 (PERG 8) and the relevant legislation.

The Q&As that follow are set out in sections:

• general issues (PERG 14.2);
• activities relating to home reversion plans (PERG 14.3);
• activities relating to home purchase plans (PERG 14.4);
• activities relating to regulated sale and rent back agreements (PERG 14.4A);2
• the ‘by way of business’ test (PERG 14.5);
• carrying on a regulated activity in the United Kingdom (PERG 14.6);
• exemptions (PERG 14.7);and1
• financial promotions (PERG 14.8)1.1