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Packagers have no choice when it comes to regulatory status

Letter of the week

From Chris Gardner

Last week&#39s editorial and lead story on page 4 (Mortgage Strategy May 31) made for interesting reading but one thing bothers me: it appears that many in the mortgage market are unable to grasp the fact that to be regulated by the FSA you have to be carrying out a regulated function.

True business-to-business or pure packagers do not carry out any regulated functions and therefore cannot be regulated – even if they want to be. Therefore, one must conclude that if six in 10 packagers are going to apply to be directly authorised then they will either have those applications rejected or they are not true packagers.

The point I&#39m trying to make is that there are many in the industry that are under the impression that packagers are pleased to have avoided the FSA regime. Yet I am sure that most firms in our position would love to have just got on with being regulated at the same time as everyone else. Certainly, for ICMG, this is not a situation of choice.

If the research says that six in 10 packagers with a business-toconsumer arm are going to be directly authorised then I assume the other four will be joining a network. But hang on, that can&#39t be right either – what packager would let half its business go through a network that almost certainly would require the use of a different distributor or packager?

I&#39m not trying to be a smart Alec but it annoys me when people bang on about packagers avoiding regulation without qualifying that statement.



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