All systems go as mortgage regulation begins
01/11/2004
The Financial Services Authority has published details of firms regulated to conduct mortgage business - either directly authorised or as appointed representatives of authorised firms. This information enables lenders and customers to check whether the firms with which they are dealing have the appropriate authorisation. This can be done using the Firmcheck service on the FSA web site or, for consumers without internet access, by calling the FSA's help line on 0845 606 1234.
The FSA received 7,676 applications from the mortgage sector for authorisation for the first time or variation of permission (where a firm was already authorised to conduct other regulated activities). In a rigorous authorisation process every application was subject to checking. As at M-Day (31 October), the total number of directly authorised firms able to conduct mortgage business was 7,119 4,226 new authorisations and 2,893 variations of permission. In addition, authorised firms with a mortgage permission had a total of 11,767 appointed representatives.
As result of its scrutiny the FSA found that 75% of the new applications raised regulatory issues requiring further enquiries and half required substantial investigation. Wherever applicable the firms were required to take remedial action before permission was granted. In addition, nearly 300 mortgage firm new applications were investigated on a thematic basis, and where there was evidence that the firms would not be compliant with FSA rules by M-Day the FSA required remedial action. 210 firms so far have either withdrawn from the authorisation / variation of permission process or received a final notice of refusal.
Notes for editors
Further details about Mortgage and General Insurance Regulation can be found here on our website.
Of the 347 applications still being processed (i.e. the firms are neither authorised/have varied permission nor withdrawn/refused), a number are firms where applications are part way through the refusal process, but the majority simply arrived too late for consideration by M-Day. This includes approximately 200 firms applying for the first time for permission to conduct investment as well as mortgage business.
Where an authorised firm has notified the FSA of an appointed representative, it is up to the authorised firm to determine what activities the appointed representative may carry out (as long as the authorised firm has the relevant permissions itself). It is therefore likely that some of the 11,767 appointed representatives mentioned here are not permitted to do mortgage business but are instead appointed to conduct an investment activity only.
The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
The FSA aims to maintain efficient, orderly and clean financial markets and help retail consumers achieve a fair deal.