On 30 October 2024, HM Treasury (HMT) published (as part of the Autumn 2024 Budget) its second post-implementation reviews of the Small and Medium Sized Business (Credit Information) Regulations 2015 and the Small and Medium Sized Business (Finance Platform) Regulations 2015.
The Small and Medium Sized Business (Credit Information) Regulations 2015 (the CCDS Regulations) established commercial credit data sharing (CCDS), which was intended to increase competition by lowering the barriers to entry in the small and medium sized entity (SME) credit market. Under the CCDS Regulations, designated banks are required to share all their credit data on in-scope SME customers with designated credit reference agencies (CRAs), and the CRAs are then broadly required to provide the information to other lenders in certain circumstances.
The Small and Medium Sized Business (Finance Platform) Regulations 2015 (the Financial Platform Regulations) established the Bank Referral Scheme (BRS), which requires designated banks to refer SME business customers that they reject for finance, to platforms that can match the SME with alternative finance providers. The Financial Platform Regulations give HMT the power to designate the banks and platforms to which the regulations apply.
For both pieces of secondary legislation, HMT concludes that the schemes have broadly met their objectives. It does, however, highlight some improvements that could be made. For example, the CCDS Regulations review highlights that CCDS could be made more flexible to ensure it continues to function in a way that is complementary to innovations (such as Open Finance) which create new opportunities to support SME access to finance. The review of the Finance Platform Regulations suggests that, while the BRS continues to meet its original objectives, there is further scope to explore whether the current statutory and operational design of the scheme is properly aligned with those objectives.
Next steps
HMT plans to launch consultations in Spring 2025 on how it can further enhance the BRS and CCDS.