Non-Regulated Agreement

Meaning and Definition

A non-regulated agreement refers to a financial agreement that is not subject to regulatory oversight by the Financial Conduct Authority (FCA) in the United Kingdom. Non-regulated agreements are typically those entered into for commercial purposes or specific types of lending that fall outside the scope of consumer credit regulations.

Why it is important to know

Understanding the distinction between regulated and non-regulated agreements is important for borrowers as it determines the level of protection and regulatory oversight applicable to their loan or finance agreement. Non-regulated agreements provide less regulatory protection compared to regulated agreements, as they are not subject to the same consumer credit rules and regulations. Borrowers should carefully consider the terms and conditions, interest rates, and other aspects of non-regulated agreements and assess their suitability based on their specific needs and circumstances.

Example in car finance

Suppose a business owner intends to finance a fleet of vehicles for their company's use. Since this arrangement is for commercial purposes rather than personal use, the financing agreement may fall under a non-regulated agreement. The terms, conditions, and interest rates for non-regulated agreements may differ from those in regulated consumer credit agreements. It is important for the business owner to review and understand the terms of the non-regulated agreement and assess its implications on their business finances and obligations.