72G.—(1) There is excluded from article 5 any activity which is carried on by a local authority.
(2) There is excluded from articles 21, 25(1) and (2), 39A and 53 any activity carried on by a local authority which relates to a contract of insurance which is not a qualifying contract of insurance.
(3) There is excluded from articles [F225A(1)(b), 25A(2)], 25B, 25C, 25E, 36A, 39D, 39E, 39F, 39G, F3... 53B, 53C, 53D, 60N, F3... 63B, 63F, 63J or 89A any activity which is carried on by a local authority.
[F4(3A) There is excluded from article 25A(1)(b) and (2) any activity which is carried on by a company which is a wholly-owned subsidiary of a local authority.
(3B) There is excluded from articles 25A(1)(a) and (2A), 53A, 53DA and 61 any activity which is carried on by a local authority, or a company which is a wholly-owned subsidiary of a local authority, in so far as the contract F5...—
[F6(a)was entered into before 21st March 2016; or
(b)is entered into on or after 21st March 2016 and—
(i)is of a kind to which the mortgages directive does not apply by virtue of Article 3(2) of that directive;
(ii)is a bridging loan; or
(iii)is a restricted public loan in relation to which the requirements of paragraph (6) are met.]]
[F7(4) There is excluded from article 60B—
[F8(a)any activity which is carried on by a local authority—
(i)in relation to a credit agreement which was entered into before 21st March 2016, or which is entered into on or after that date for a purpose other than acquiring or retaining property rights in land or in an existing or projected building; and
(ii)in so far as the activity is carried on in relation to a credit agreement of a kind to which the consumer credit directive does not apply by virtue of Article 2(2) of that directive;]
(b)any activity which is carried on by a local authority [F9in relation to a credit agreement entered into on or after 21st March 2016], the purpose of which is to acquire or retain property rights in land or in an existing or projected building, in so far as the credit agreement meets one of the following conditions—
(i)it is of a kind to which the mortgages directive does not apply by virtue of Article 3(2) of that directive;
(ii)it is a bridging loan; or
(iii)it is a restricted public loan in relation to which the requirements of paragraph (6) are met.]
(5) There is excluded from article 64 any agreement made by a local authority to carry on an activity of the kind excluded by paragraphs (2) to (4).
[F10(6) The requirements of this paragraph are that—
(a)the borrower receives timely information on the main features, risks and costs of the loan at the pre-contractual stage; and
(b)any advertising of the loan is fair, clear and not misleading.
(7) In this article—
“bridging loan” has the meaning given by Article 4(23) of the mortgages directive;
“borrower” means a person receiving credit;
“consumer credit directive” means Directive 2008/48/EC of the European Parliament and of the Council of 23rd April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EC;
“credit” includes a cash loan and any other form of financial accommodation;
“restricted public loan” means credit that is—
offered to a particular class of borrower and not offered to the public generally;
offered under an enactment with a general interest purpose; and
provided on terms which are more favourable to the borrower than those prevailing on the market, because the credit meets one of the following conditions—
it is interest free;
the rate of interest is lower than that prevailing on the market; or
the rate of interest is no higher than that prevailing on the market but the other terms on which the credit is provided are more favourable to the borrower; and
“wholly-owned subsidiary” has the same meaning as in section 1159 (meaning of “subsidiary” etc.) of the Companies Act 2006 and, for the purposes of this definition, a local authority is to be treated as a body corporate.]]
Textual Amendments
F1Arts. 72G, 72H inserted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), art. 1(3)(4), 2(43)
F2Words in art. 72G(3) substituted (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 4(27)(a)(i) (with Pt. 4)
F3Words in art. 72G(3) omitted (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by virtue of The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 4(27)(a)(ii) (with Pt. 4)
F4Art. 72G(3A)(3B) inserted (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 4(27)(b) (with Pt. 4)
F5Word in art. 72G(3B) omitted (17.3.2016 for specified purposes, 21.3.2016 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2016 (S.I. 2016/392), art. 1(2)(3)(c), 2(20)(a)(i) (with Pt. 5)
F6Art. 72G(3B)(a)(b) substituted for arts. 72G(3B)(a)-(c) (17.3.2016 for specified purposes, 21.3.2016 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2016 (S.I. 2016/392), art. 1(2)(3)(c), 2(20)(a)(ii) (with Pt. 5)
F7Art. 72G(4) substituted (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 4(27)(c) (with Pt. 4)
F8Art. 72G(4)(a) substituted (17.3.2016 for specified purposes, 21.3.2016 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2016 (S.I. 2016/392), art. 1(2)(3)(c), 2(20)(b)(i) (with Pt. 5)
F9Words in art. 72G(4)(b) inserted (17.3.2016 for specified purposes, 21.3.2016 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2016 (S.I. 2016/392), art. 1(2)(3)(c), 2(20)(b)(ii) (with Pt. 5)
F10Art. 72G(6)(7) inserted (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 4(27)(d) (with Pt. 4)