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The final countdown

  • 09/09/2003
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In an exclusive article for Mortgage Solutions, the FSA clarifies its current plans, and warns that the pace of regulatory change is about to step up a gear

The Financial Services Authority (FSA) is due to publish a number of key papers in the third quarter of the year, including the final costs and the way in which it will introduce threshold conditions on mortgage and general intermediaries, but it is also taking steps to ensure its processes remain transparent and trying to make itself more accessible.

I would just like to start off with a big ‘thank you’ to everyone who took the time and effort to respond to the FSA’s latest consultation paper on the new mortgage regime. The consultation paper CP186 was the last opportunity for the industry to comment on the FSA’s proposals for regulating the mortgage sales process. The consultation period closed on 22 August and the regulator received 130 responses.

The way ahead

What the FSA will do now is sit down and go through the responses in detail. It is always grateful for feedback on its proposals, so it takes the time to look at each response it gets.

The FSA considers the responses as a whole and picks out general themes, as well as individual and more specific comments. It will then consider whether to change any of the original proposals in the light of the responses. Obviously this process takes a bit of time but the aim is to publish the final mortgage rules by around the end of October. When it publishes the final rules, it will also outline, in general terms, the responses it has had and explain any changes it may have made as a result. So, thanks again for your comments and keep your eyes peeled for the final rules in the next month or so.

In the meantime, the FSA wants to keep intermediaries up-to-date with all the latest developments in the run-up to the start of mortgage regulation at the end of October 2004. To this end, it has recently launched a mortgage and general insurance section on the FSA website. Please take a look at:

On the website, intermediaries can find a range of factsheets to answer some of the basic questions which all those in the mortgage sector should be asking themselves. The factsheets published to date include information about the options available for firms doing mortgage business. There is also a factsheet providing a guide to the FSA’s publications on the regulatory framework for mortgages. The information on the website is constantly being updated, so it is worth keeping an eye on it.


The other main news is that the FSA will be launching a high profile campaign in November, when firms can actually start registering for authorisation. A dedicated contact centre up will be up and running from early November where firms will be able to get help about how to apply for authorisation and register for an application pack in advance. The FSA will be accepting applications from early 2004. If intermediary firms apply before 1 April 2004, they will be eligible for a discount on their authorisation fees. It will also be a bit cheaper if firms apply electronically rather than in paper form.

Other things to watch out for in the near future are policy statements on:

1) the ‘prudential standards’ (such as capital requirements) for mortgage and general insurance firms;

2) extending the appointed representatives regime to mortgage and general insurance firms.

And very soon the FSA also hopes to consult on the reporting requirements for mortgage and general insurance firms.

More details on all of this will be posted on the FSA’s website, so please keep checking it for the latest news and developments. From September onwards, the FSA is also going to tour the country, giving a range of seminars and workshops to help firms prepare for regulation. Details of all of these are also on the website, under ‘M&GI events’. FSA representatives will also be speaking at The Mortgage Event 2003 (see story, p5).

The FSA is looking forward to meeting mortgage professionals in all parts of the UK, hearing their comments and answering any questions they may have about what regulation will mean.


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