The FSA have specifically asked mortgage advisers and other industry figures for their opinion on the below issues arising from CP146.
Respondents are asked to send their views to:
High Street Firms Division
Financial Services Authority
25 The North Colonnade
London E14 5HS
Chapter 4 - Legislative scope of the regime
Q1: Do you have any comments on the proposed guidance and are there any areas where it would be useful to expand on it?
Chapter 7 - Mortgage selling: the context for regulation
Q2: Given the safeguards proposed for each process (see Table 7.4) do you have any comments on our proposal to distinguish between three selling processes (advised sales, non-advised filtering questions sales and non-advised execution-only sales)for regulating mortgage selling?
Q3: Do you have any comments on our proposals to differentiate higher and lower risk products in our rules and on the definitions proposed for lower risk products?
Chapter 8 - Financial promotions
Q4: Do you agree with our proposal that a statement of the APR should be required as part of disclosure for secured overdrafts?
Q5: Do you agree that the simplified approach we propose in relation to qualifying credit promotions is equally appropriate for the new controlled activities of 'advising on ' and 'arranging ' mortgages??
Chapter 10 - Independence in the mortgage market
Q6: Given this analysis of potential advantages and disadvantages of restricting use of the term independent, do respondents prefer option 1 or option 2? Are there any other possible advantages and disadvantages that we need to consider?
Q7: Might it be justifiable to have different requirements for independent mortgage firms compared to the requirements that are proposed for independent investment business firms? (For example, could the term be restricted to 'whole of market' for mortgages even if it were extended to include other requirements for investments?)
Q8: Can you provide any information on the likely costs to the industry and the benefits to consumers of either option 1 or option 2?
Q9: What are your views on extending the definition of independence to non-advised sales? Do you see any major difficulties/costs with this approach?
Q10: In principle, do you think that firms should be able to have a different status in relation to different regulated products or different consumers, providing this is made clear in the initial disclosure document?
Chapter 11 - Initial disclosure
Q11: Do you agree with our approach to initial disclosure and the proposed content of our initial disclosure document?
Chapter 12 - Suitable advice requirements
Q12: Do you have any comments on our approach to suitability, including views on the two options proposed? What are your views on the two options proposed for the third stage of the process?
Chapter 13 - Requirements on filtering questions
Q13: Do you agree with our preferred option for dealing with filtering questioning used in non-advised sales (i.e. option 1 in paragraph 13.6)?
Q14: Do you agree with our proposal that filtering questions should be scripted and that staff administering the questions should be supervised to prevent them from inadvertently offering advice? Or do you see merit in an examination requirement as an alternative to requiring questions to be scripted for sales using filtering questions?
Chapter 14 - Training and competence
Q15: Do you agree with our overall approach to training and competence and, in particular with the conclusion that an examination is not generally required for non-advised sales apart from lifetime mortgages?
Q16: Do you have any views on proposed transitional arrangements for training and competence requirements?
Chapter 15 - Product disclosure - pre–sale and offer stage
Q17: Do you have any comments on the template and the proposed content of the PAI?
Q18: What are your views on whether firms should be required to unbundle the costs of advice/distribution from the cost of the product in the mortgage market?
Q19: What are your views on whether commission/remuneration should be disclosed when mortgages are sold through intermediaries or by lenders directly?
Q20: What are your views on our proposals for a PAI for mortgages without a regular repayment plan and mortgages requiring a regular minimum repayment that does not cover all the interest that has accrued?
Q21: Do respondents have any comments on our proposals regarding when a pre-application illustration should be provided to a customer?
Q22: Do you have any comments on our proposals for offer stage disclosure?
Chapter 16 - Rules to ensure fair treatment of consumers
Q23: Do you agree with our approach to addressing excessive fees and the non-refund of fees?
Q24: Do you agree that the package of measures proposed (the existing financial promotions rule, the principles for businesses and consumer education) to address high-pressure sales provide consumers with the protection they need?
Q25: Do you have any views about our approach to inducements?
Q26: What are your views on retaining a responsible lending provision for mortgage sales other than advised sales?
Chapter 18 - Lifetime mortgages
Q27: What are your views on our proposals for assessing suitability for lifetime mortgages?
Q28: Do you agree that additional training and competence requirements are appropriate for lifetime mortgages?
Q29: Do you have any comments on the template and the proposed content of the PAI for lifetime mortgages?
Q30: Do you have any comments on our proposals for offer stage disclosure for lifetime mortgages?
Chapter 19 - Lower risk mortgages
Q31: Do you agree with the proposals to vary our approach to regulation for lower risk mortgages?
Chapter 20 - Business loans
Q32: This chapter describes the ways in which we propose to adapt our general approach to reflect the differences that exist between business loans and standard mortgages. Do you support the approach we propose - and do you have any views on the practicality or proportionality (either in the use of individual tools or on the overall package)?
Chapter 21-Variations to contracts
Q33: What are your views on these proposals for addressing post-sale contract variations?
Chapter 22 - Redress for consumers: complaints and compensation
Q34: Do you agree with this analysis of the possible detriment? Can you provide any evidence of how widespread claims of these types are, or of the typical amount of loss, or of other loss scenarios?
Q35: Taking cost factors and the likelihood of claims occurring into account, do you think that the provision of mortgage advice and arranging should be covered by the Scheme?