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Mortgage adviser national register mandatory by 2016

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  • 05/09/2014
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In a Treasury consultation paper out today, a national register for mortgage advisers and Appointed Representatives will be a reality by Spring 2016 in a move by Europe to give the regulator a tighter grip on the industry.

To align UK regulation with the European Mortgage Credit Directive (MCD) passed in February, an open national register will need to be established by 21 March 2016.

The consultation warns there will be ‘a number of changes’ to ensure adviser compliance and only those correctly registered will be allowed to do business.

This latest consultation, which will also regulate accidental buy-to-let landlords despite a bitter lobbying battle, comes ahead of the government’s bid to align the two regulatory regimes.

Proposed changes to the Financial Services and Markets Act also include handing power to the regulator to vary or cancel a mortgage adviser’s permissions and a move to set up the regulatory infrastructure for brokers to passport in and out of the UK.

Second-charge loans will also be moved into the current mortgage regulatory regime and a second consultation paper and cost benefit analysis on that is expected later this year.

The consultation paper said: “In drafting these changes the government has sought to use copy out where possible, although this is not always appropriate as the proposed changes largely amend existing legislation, which is structured differently to the MCD.”

The UK government waited until the European rules emerged before it launched its own consultation in a bid to smooth the process of bringing two regimes together. The government has made it clear for some time that the MCD offers little cost or regulatory benefit to the UK so soon after the implementation of the Mortgage Market Review in April.

The consultation: Implementation of the EU Mortgage Credit Directive will run for 8 weeks but the government wants early legislation drafted by early 2015.

The paper said: “The government is aware of the challenges faced by industry in managing the transition to a regulatory regime that is MCD compliant, particularly as a result of the relatively long sales process for mortgages.

“This means that careful consideration needs to be given as to how to the legislation can best support lenders in managing this pipeline of loans to minimise disruption to both consumers and lenders. The government will use the consultation period to consider in more detail whether there are further steps it could take to smooth this process.”

To respond to the paper, click here.

 

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