The Association of Mortgage Intermediaries has slammed the FSA for admitting it will take account of non-regulated practices by firms when it is assessing them post-Mortgage Day.
Although the FSA denies that this is a sign of regulatory creep it says it will include activities like buy-to-let and second charge mortgages within its overall evaluation of firms after October 31.
FSA spokesman Robin Gordon-Walker says: “We would have to take into account the whole firm and its non-regulated activities as these could impinge on such issues as solvency.
“This is not a case of charging in and regulating all aspects of their business as there is no rulebook on non-regulated activities. It is just a matter of taking in the whole picture.”
But Chris Cummings, director of AMI, says this practice could have far-reaching consequences for intermediaries.
He says: “If a broker has a sales process for buy-to-let that is separate from its regulated mortgage activities and the FSA deems it to be of a lower standard, the firm might well expect the FSA to come down heavily on it.”
He adds: “The FSA is extending its authority into areas that it has no remit to cover. We will be keeping an eye on this issue and would advise intermediaries simply to exercise the same standards across the whole of their business.”
And Stephen Atkins, managing director of Freedom Finance, says: “This could be a concern for brokers as it implies a measure of regulatory creep. It could be a sign of things to come with the FSA encroaching on all the business areas of an intermediary firm.”