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Advisers told to start planning now for MCD changes – FCA

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  • 16/09/2015
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Advisers told to start planning now for MCD changes – FCA
Advisers must plan now ahead of the Mortgage Credit Directive (MCD) deadline to make sure they can satisfy disclosure requirements and minimise pipeline delays, said Keith Hale of the Financial Conduct Authority.

Speaking at the Financial Services Expo in London, Hale, technical mortgage specialist at the FCA, outlined a number of key areas which advisers must be fully aware of in order to continue trading compliantly after 21 March 2016.

“The directive requires additional service disclosure and it has to be in a durable medium,” said Hale. He said this could be a problem for those speaking to a client on the phone as the durable medium disclosure must be with the client before an adviser can move forward with any intermediation service.

“One way this could be done is to ask for the client’s email and send the disclosure document across while you are on the phone to them,” he said. “You must send the document before you move forward…if you can’t get it across to the client during the conversation, you have to stop that conversation.”

Hale said the MCD will be implemented immediately on 21 March next year with no overhang. Cases which have not completed by the implementation date will have to be reassessed under the new rules. “Advisers need to consider their pipeline because the directive kicks in on 21 March. How long will it take to complete the deal? If it’s likely to be post-21 March then it needs to be done under the new rules,” said Hale.

He said that the FCA would not consider a case which had been started pre-MCD but had to be rebroked and reunderwritten post-MCD as a ‘good consumer outcome’.

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