Brokers who have not yet reregistered with the Mortgage Code Compliance Board may break out in a cold sweat when they are reminded that registration renewal forms received by the board after April 30 will not be accepted.
After this date the firm will have to apply for registration as if it were a new company – which will involve extra administration costs as well as an additional fitness and propriety checking fee.
But for those brokers who intend to become appointed representatives, their chosen network could soon wipe that sweat away. Provided the broker is committed to the AR route and their network is willing to cover compliance matters, they can use their network's MCCB registration number until Mortgage Day rather than re-registering with the board themselves.
Brad Baker, head of communications at the MCCB, says it is up to individual firms to decide if using a network's MCCB number is the best option for them.
“It depends on how the broker conducts their business,” he says. “If they are committed to their network and place their business through the network's books they may prefer to use the network's registration number as long as it takes responsibility for compliance and any complaints.”
However, Baker believes this route will be only taken by a small number of brokers – a belief underlined by the large number of renewal registrations the board has received.
“The huge majority have already re-registered with the MCCB and these numbers are well ahead of the previous year,” he says. “The indications are that there are more firms going down the directly authorised route than anticipated. The FSA expected around 7,000 advisers to go direct but the numbers are exceeding this.”
Although it might be the most hassle-free option for some brokers, the board warns that using a network's MCCB number could cause problems.
“By not renewing their registration with us, brokers could lose the due credit benefits provided by the FSA if they choose later to go directly authorised,” he adds. “This means they could potentially be subject to greater scrutiny from the FSA.”
Alan Hinett, mortgage broker at Wolverhampton-based FSC Investment Services, says his firm hasn't renewed its licence with the MCCB yet. “There's still a lot of confusion in the market over which authorisation route to take,” he adds. “We haven't decided whether we'll stay with our network or go for direct authorisation and it is the same for a lot of other firms. Therefore, choosing whether to use the network's MCCB number won't be a clear-cut decision either.”
And Brian Humphreys, managing director of Weston-super-Mare-based 1 to 1 Mortgages, believes it is safer for brokers to renew their registrations.
“Many networks are still carrying out checks on potential ARs which could take a couple of months,” he says. “And there's always the danger the network may not get authorised so the safe option is to pay the £40 renewal fee to the MCCB. Also many networks are still coming out with their propositions so brokers are playing the waiting game.”