Enquiries are frequently made as to the regulatory status of Rent to Own.
Those enquiries largely relate to the status of the Castledene Group of Companies, Rent to Own itself, and the nature of the Rent to Own lease option process with financial services legislation in mind.
Rent to Own has invested a great deal of time and expense on advice concerning the issues of financial regulation, and the extent to which Rent to Own and the Castledene Group of Companies must comply with current regulations, more specifically the Financial Services and Markets Act 2000 (“FSMA”) or the Financial Services and Markets Act (Regulated Activities) Order 2001 (“RAO”).
In the first instance, Rent to Own employed the services of Compliancy Services Limited, one of the UK’s leading independent Financial Conduct Authority compliance consultants, to determine whether the function of Rent to Own might be deemed a designated investment or a designated activity, satisfying the grounds for regulation.
The opinion of Compliancy Services Limited, provided in August 2016, was unequivocal:
“It is the opinion of CSL that on the basis of the business model discussed the company does not undertake the performance of designated investment activities in relation to the advising and or arranging of designated investment types and Castledene’s rent to buy product is therefore not regulated under FSMA”
More recently, and by means of reinforcing the advice of Compliancy Services Limited, Rent to Own instructed Counsel at Gough Square Chambers in London to address similar matters.
Counsel was instructed to advise:
“It is my opinion that the RTO product is not a specified type of investment and neither Castledene nor any other party are carrying out a regulated activity which requires authorisation. Further, in my opinion, this is the preferable outcome and, in any event, there is no clear way of making the RTO product a specified investment without fundamentally changing its character”
Both the report of Compliancy Services Limited and Counsel’s opinion are available on request, but Rent to Own relies on the advice obtained that neither the Rent to Own model or the Castledene group of companies operating the Rent to Own model meet the criteria requiring regulation or authorisation from the Financial Conduct Authority.
Rent to Own has helped me become a home owner. That is position I never thought I would be in 5 years ago.Anonymous - Proud home owner
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