Mortgage regulation must be a seriously thankless task for FSA officials. Appearances at industry events invariably include run-ins with disgruntled practitioners and if professional popularity is something they had hoped for in life, Canary Wharf was perhaps not the place to seek it.
It may come as slight consolation then that the AMI helpdesk received dozens of calls last week praising the regulator and the authorisation process. Wondering what could possibly drive mortgage intermediaries to feel positive about the regulator? Then you're probably not among the firms who received their final Part IV permission letters last week.
Those who received the letters are feeling rather chirpy and can approach Mortgage Day with confidence. The FSA had promised to send out the letters at least four weeks before M-Day and it is pleasing to see it is on schedule.
Appointed representatives of networks that have received their Part IV permissions will be equally delighted. The due diligence and vetting that is so important in choosing a network will hopefully pay off in the coming weeks. However, many ARs will still be waiting for the FSA to vet approved persons.
For those who weren't in the first group of recipients – don't worry. As with the distribution of minded to authorise letters the FSA is using a batch mail-out process. If you received an MTA, your letter should be on its way.
Firms who applied before the April 30 deadline will also sleep easy knowing that they are guaranteed a decision in time for Mortgage Day. The hard work involved in the application process will seem entirely justified.
The permission letters were sent out in the same week as the most recent announcement on application numbers. As at September 3, the FSA had received 3,950 applications for authorisation with 3,375 minded to authorise letters sent out to firms. Add to this the 2,906 variations for permission to do mortgage business from already-regulated firms and a rough figure of 6,300 emerges as the number of firms likely to be directly authorised.
Figures for mortgage and general insurance networks also reveal a healthy number of principals for the industry's ARs. MTA letters were received by 33 firms wishing to operate as mortgage networks and 46 extending their permission to include mortgages – a total of 79 networks with a mortgage proposition.
The priority for these firms is to meet the last-minute rush of AR applicants. Regardless of efforts to speed up their internal processes, networks still have to apply to the FSA on behalf of its ARs for approved person status.
With just 40 days to go this will be a make or break process for AR latecomers. Firms in this position should be prepared to offer the FSA and their chosen principal every assistance – and understand that AMI is in constant dialogue with the FSA to work towards a smooth transition.
I Should Know But I Don't
Q: What is a real time qualifying credit promotion?
A: This refers to any promotion by a firm that involves face to face or telephone contact with a client or prospective client. Such contact will not be allowed where there is no existing relationship between the firm and the prospect, and the FSA has moved to ban cold-calling (see MCOB 3.7.3R – and AMI Factsheet 6). Firms can get their clients' approval for future contact and it is best to do so during the advice process and keep a record of their consent. Firms considering real time promotions should keep the following in mind:
Do you have prior consent?
Is the individual making the promotion acting in a way consistent with Principal 7?
Is that person clear about the purpose of the communication at the outset?
Does the recipient wish to proceed/be offered right of refusal if not?
Is a clear contact point within the firm given to the client?
Is the communication taking place at an appropriate time?
Does the person approving the qualification have appropriate expertise?
If the answer to any of the above is no, the communication must not proceed.