The Treasury has extended exemptions under “arranging” regulation to include introductions to all authorised firms.
The last consultation on mortgage regulation had proposed to make only those firms that help borrowers procure independent advice exempt from regulation.
Now the Treasury has confirmed that introductions to any authorised person or appointed representative – “whether independent or otherwise” - should be exempt from regulation.
The change in regulatory boundaries comes with some conditions. The Treasury specifies that the introducer must not handle any money paid by the client in connection with any transaction they complete with the authorised person.
And before making the introduction, the introducer must disclose if they are a member of the same group as the authorised person.
The Treasury decided on broader grounds for exemption after a number of respondents said the regulation of introducers “that introduce customers to firms that are not independent, but still authorised” would have “a significant impact on the structure of the market”.
The respondents argued that consumers who use introducers would be “adequately protected by the fact that the authorised firms to which they are introduced are subject to FSA rules”.
The Treasury has decided the limited potential for consumer detriment does not justify affecting the “thousands of firms that currently carry on mortgage-related introductions”.