MS Leader: Missed opportunity by FSA
The extension of the approved persons regime was the one bright spot in the regulator’s first Mortgage Market Review consultation paper back in October 2009.
As the Financial Services Authority pointed out at the time, there are numerous benefits to be gained from individual registration and extending the approved persons regime, the biggest being that every broker will have their own FSA number. If the regulator really wants to stamp out the cowboys that operate in the market, this is one of the best ways to do so.
So the disappointment in the industry last week when the FSA said it was no longer aiming for a specific financial year and would only introduce the changes when it was “practically possible”, was palpable.
There’s no denying the regulator has a lot on its plate, as it splits in two and becomes the Prudential Regulation Authority and Financial Conduct Authority. But the only conclusion can be that, just as with the original MMR paper, it bit off more than it could chew with its evaluation of the market in 2009.
Back then it described the benefits of extending the approved persons regime to brokers as “improving standards of fitness and propriety among individual mortgage advisers and prohibiting rogue individuals from the industry”. This analysis was sound - it’s a shame the FSA failed to make this worthy aim a priority.
Meanwhile, this week’s lead story on page four warns brokers about the perils of accepting introduced business without making checks on the clients and cases they submit. Your FSA licence is like a mint condition Rolls-Royce - you wouldn’t let someone without a licence take it for a spin because you’ve only got yourself to blame if it comes back ready for the scrapheap.