Update on Small Business, Enterprise and Employment Act 2015

14 Jan 2016



One of the aims of the Small Business, Enterprise and Employment Act 2015 (SBEE Act) is to improve the access of businesses and individuals to finance.

Its sections 4 and 5 are one of the ways in which this is to be achieved. They have now been brought into effect by the following regulations which came into force on 1 January 2016:

  • The Small and Medium Sized Business (Credit Information) Regulations 2015 (Credit Information Regulations).
  • The Small and Medium Sized Business (Finance Platforms) Regulations 2015 (Finance Platforms Regulations).

These regulations are intended to make it easier for SMEs to obtain finance from challenger banks and alternative finance providers.

Credit Information Regulations

These regulations require:

  • designated banks to provide information to designated credit reference agencies (CRAs) on their SME customers, subject to the agreement of those customers;
  • designated CRAs to provide that information to finance providers to assist them in deciding whether to offer those SMEs finance, once again subject to their agreement; and
  • require designated CRAs to provide that information to the Bank of England at its request.

The regulations provide rights of access to, and correction of, information to individuals and small firms under the Data Protection Act 1998 and the Consumer Credit Act 1974 in relation to designated CRAs that are not also authorised by the FCA.

Finance Platforms Regulations

These regulations require:

  • designated banks to provide information to designated finance platforms on their SME customers who have made unsuccessful applications for finance to the banks, subject to the agreement of those customers; and
  • designated finance platforms to provide that information to finance providers.


There are various protections in both of the regulations:

  • the FCA is obliged to monitor and enforce compliance with them;
  • the Financial Ombudsman Scheme is extended to include designated CRAs and designated finance platforms.

SMEs to which regulations apply

Both of the regulations apply to a business which:

  • has an annual turnover of less than £25 million and is not part of a group which has an annual turnover equal to or greater than £25 million;
  • carries out commercial activities as its principal activity and has an address in the UK;
  • does not carry out regulated activities as its principal activity; and
  • is not owned or controlled by a public authority,

(Section 7(1) of SBEE Act and regulation 2(1) of each of the regulations).

Designated banks, CRAs and finance platforms to which regulations apply

These will be the banks, credit reference agencies and finance platforms which are designated for the purposes of the regulations by the Treasury.

The Government announced in the 2014 Autumn Statement that Allied Irish Bank, Bank of Ireland, Barclays, Clydesdale & Yorkshire Bank, Danske Bank, HSBC, Lloyds, Royal Bank of Scotland and Santander are intended to be designated banks.

In the 2015 Autumn Statement, it was announced that Experian, Equifax and Creditsafe will be designated as credit reference agencies.

The British Business Bank has been undertaking a due diligence process on finance platforms that have expressed an interest in being designated.

The Treasury will publish details of all these initial designations.

If you require further information on this topic please contact Gwen Godfrey at gwen.godfrey@dmhstallard.com.

The e-bulletin DMH Stallard published on this topic last year can be accessed here.




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