MMR: Brokers to be individually regulated
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The Financial Services Authority has proposed today in its Mortgage Market Review that it will be extending its approved persons regime to mortgage brokers.
It says it considers certain functions within a firm to be of sufficient importance that the individuals carrying out those functions need to be Approved Persons, and assessed by the FSA as ‘fit and proper’ before they can carry them out.
After that it says an Approved Person must continue to comply with the Fit and Proper
test for Approved Persons and the Statements of Principle for Approved Persons.
The paper says: “Controlled Functions are those jobs or responsibilities within a business that have a particular regulatory significance. Currently for mortgage and other home finance firms the only relevant Controlled Functions are some of the ‘significant influence’ functions i.e. those individuals who exercise significant influence over the firm.
“We are including in the DP a proposal to extend the Approved Persons regime to mortgage advisers and/or arrangers who deal with consumers (‘consumer-facing’ functions) and to those advisers and/or arrangers who are responsible for overseeing compliance (‘compliance oversight’ functions).”
It says there are several possible benefits from applying the consumer and compliance oversight functions to mortgage intermediaries that may mitigate risks to our consumer protection and financial crime objectives. These include improving standards of fitness and propriety among individual mortgage advisers and prohibiting rogue individuals from the industry.
Such a regime would also enable the FSA to impose the full range of disciplinary sanctions on individual advisers to help raise standards.
Readers' comments (4)
Anonymous | 19 Oct 2009 3:33 pm
“We are including in the DP a proposal to extend the Approved Persons regime to mortgage advisers and/or arrangers who deal with consumers (‘consumer-facing’ functions) and to those advisers and/or arrangers who are responsible for overseeing compliance (‘compliance oversight’ functions).”
Does this mean just brokers or bank "arrangers" as well?
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Anonymous | 19 Oct 2009 3:59 pm
"
advisers and/or arrangers who deal with consumers (‘consumer-facing’ functions) and to those advisers and/or arrangers who are responsible
"
Surely that means ANY organisation that empoyes such people - would be lopsided NOT to include the banks!! Or, perhaps the bank staff don't advise? Hmmm.
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Anonymous | 20 Oct 2009 3:49 pm
how much more low level regulation can this industry tolerate when so much is wrong and corrupt at board and goverment level. As usual the fat cats get it wrong or get caught yet the remedy for this is to impose more controls on the advisers and brokers. Where was FSA regulation Body when all these Banks where getting it wrong, breaking rules and going bust? Probably trying to work out how to blame the Independents for the global collapse of the Financial system. No doubt it will come to light from some government think tank we are responsible for global warming too.
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Anonymous | 21 Oct 2009 9:48 am
Again they are using a sledge hammer to crack a nut. Advisors have been hammered for years and the sad thing we "the advisor" have always known the banks have got away with IT for decades, but as usual it always comes back to us.
While I'm on my high horse there is a straight forward solution to citibankers recieving massive bonuses. Why not impose the same payment methods we get when selling life assurance polices. If in the first 4 years it is clear that there has been losses from bad investment practices which have allowed a banker to recieve a big fat bonus, just reverse the bonus and make him/her pay it back just like we have had to do when a policy is cancelled in the first 4 years, SIMPLES YES!
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