The latest consultation paper to be issued by the Financial Services Authority (FSA) regarding the future of mortgage intermediaries concerns amendments to its Appointed Representatives (AR) regulations.
Consultation paper 159 (CP159) proposes the extension of the AR regime to allow mortgage brokers to become AR’s rather than remain directly authorised. As ARs, brokers will act as an agent for a ‘principal’ who remains authorised by the FSA and takes responsibility for the representative’s activities. Regulatory requirements will be enforced indirectly through the principal. However, ARs cannot remain engaged in regulated activities and restrictions could be placed on the number of principals a firm has.
The FSA has proposed adopting a ‘multiple principal’ approach. This will allow ARs to have the same principal for ‘substitutable product categories’, but they must have the same principal for business falling within each category. It has identified 13 product categories across the investment, insurance and mortgage sectors, but only two apply to mortgages.
James Mayne, head of strategic development at Brit- annic Money, said: ‘The biggest issue concerns the life offices. Life companies look after their tied sales forces at the moment on the life side. I can see them setting up support businesses to look after their sales force on the mortgage side. It is too much of an opportunity to influence distribution.’
The full document is available from the FSA, and over the coming months Mortgage Solutions will be continuing its Regulatory Response Campaign on behalf of the mortgage broker community.
Over the next few issues Mortgage Solutions will analyse the document and is inviting readers to contact the magazine with their responses. The results will be collated and submitted to the FSA on your behalf.
The deadline for responses to the consultation is 31 March 2003. To look at, or download, CP159 visit www.fsa.gov.uk
To respond to the Regulatory Response Campaign, email firstname.lastname@example.org