The Financial Conduct Authority’s consultation paper on fees and levies for the financial services industry for 2014 to 2015 had received queries over whether the second charge market should remain in its current category.
The FCA said its definitions were based on the legislation currently in place and not what may occur once the EU Mortgage Directive becomes statute.
The EU directive rules were finalised in December last year and published at the end of last month.
At the Financial Services Expo last year, the FCA’s Lynda Blackwell said there would be one secured lending market “with no distinction between first and second charges other than the way we decide to regulate them.”
But she admitted the FCA knew very little about the second charge market and continued to consult experts from the sector to educate them on how the market worked.
Following the Mortgage Market Review the FCA is expected to launch a consultation into the how the directive should be implemented.
The UK has until December 2016 to implement the directive into the UK law.
