Does Conversational AI require FCA authorisation in order to pre-qualify applicants and book them in for an appointment with a mortgage broker?
To answer this we contacted the FCA directly, and were directed to the FCA Handbook to the following points:
Having reviewed these in detail our analysis is as follows:
Article 25A of the Regulated Activities Order describes two types of regulated activities concerned with arranging regulated mortgage contracts. These are:
(1) making arrangements:
(a) for another person to enter into a regulated mortgage contract as borrower; or
OpenFi introduces the lead to the broker, thus is excluded under "PERG 4.5.10 Exclusion: article 25A(2) arrangements and introducing: Article 33A of the Regulated Activities Order (Introducing to authorised persons) excludes from article 25A(2) arrangements under which a borrower is introduced to certain persons. Introducing is only a regulated activity under article 25A(2) as it does not of itself bring about regulated mortgage contracts (see PERG 4.5.2 G)."
(b) to enter into a regulated mortgage contract with a borrower on behalf of a lender; or
OpenFi only introduces to a broker, it does not enter into any contracts.
(c) for another person to vary the terms of a regulated mortgage contract entered into by that person as borrower on or after 31 October 2004 or a legacy CCA mortgage contract entered into by that person as borrower in such a way as to vary that person’s obligations under the contract; and
OpenFi does not have any influence on contract terms.
(2) making arrangements with a view to a person who participates in the arrangements entering into a regulated mortgage contract as borrower.
OpenFi introduces the lead to the broker, thus is excluded under "PERG 4.5.10 Exclusion: article 25A(2) arrangements and introducing: Article 33A of the Regulated Activities Order (Introducing to authorised persons) excludes from article 25A(2) arrangements under which a borrower is introduced to certain persons. Introducing is only a regulated activity under article 25A(2) as it does not of itself bring about regulated mortgage contracts (see PERG 4.5.2 G)."
arranging (bringing about) regulated mortgage contracts the regulated activity, specified in article 25A(1) and (2A) of the Regulated Activities Order which is, in summary, making arrangements:
(a) for another person to enter into a regulated mortgage contract as borrower;
OpenFi introduces the lead to the broker, thus is excluded under "PERG 4.5.10 Exclusion: article 25A(2) arrangements and introducing: Article 33A of the Regulated Activities Order (Introducing to authorised persons) excludes from article 25A(2) arrangements under which a borrower is introduced to certain persons. Introducing is only a regulated activity under article 25A(2) as it does not of itself bring about regulated mortgage contracts (see PERG 4.5.2 G)."
(b) for another person to vary the terms of:
(i) a regulated mortgage contract entered into by him as borrower on or after 31 October 2004; or
(ii) a legacy CCA mortgage contract entered into by him as borrower; or
OpenFi does not have any influence on contract terms.
(c ) to enter into a regulated mortgage contract with a borrower on behalf of a lender.
(see also arranging (in relation to regulated mortgage contracts) and making arrangements with a view to regulated mortgage contracts.)
OpenFi introduces the lead to the broker, thus is excluded under "PERG 4.5.10 Exclusion: article 25A(2) arrangements and introducing: Article 33A of the Regulated Activities Order (Introducing to authorised persons) excludes from article 25A(2) arrangements under which a borrower is introduced to certain persons. Introducing is only a regulated activity under article 25A(2) as it does not of itself bring about regulated mortgage contracts (see PERG 4.5.2 G)."