The Financial Conduct Authority’s senior managers regime will be one of the biggest problems facing mortgage brokers over the next 18 months, according to the Association of Mortgage Intermediaries.
The FCA brought in the senior managers regime for banks and large investment firms in March 2016, but will be consulting this summer on extending this to the mortgage market in 2018.
Speaking at the Mortgage Strategy Leaders Forum, AMI chief executive Robert Sinclair says: “I don’t think this will be easy. Even the smaller building societies took a full year to do this and found it hard work.”
“This will be one of the single biggest problems you [brokers] will have over the next 12 to 18 months.”
The FCA has been tight-lipped on the nature of the regime extension.
But Sinclair adds that AMI expects the FCA will want an individual at the top of each broker to take overall responsibility for the firm.
But the head of each broker is also likely to be able to choose to delegate some of their responsibility to other senior staff members, he adds.
If this happens, it will need to be documented and laid out, Sinclair adds. However, this is not likely to happen to smaller brokers.
Sinclair says: “This will not happen in the smallest firms. But there will be certain sizes of firm where it will have to happen, and that will, I think, be based on turnover and numbers of staff, or a mixture of the two.”
Sinclair says the trade body will bring out templates for its members to help with the new rules.