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All mortgage brokers could be regulated

The FSA is considering regulating every individual mortgage broker and making all IFAs giving mortgage advice subject to a separate approved person status for mortgages.

The regulator says this would see the individuals of the 3,264 broking firms whose main business is mortgages become subject to the same checks as investment advisers.

While every mortgage broker firm is regulated, brokers are not individually approved.

The Association of Mortgage Intermediaries says it supports the FSA’s proposal but warns that simply replicating the existing IFA regime would not be suitable for the mortgage market.

AMI director-general Chris Cummings says: “We have previously called for individual registrations for mortgage intermediaries and we con- tinue to support this element of the proposed review by the FSA.

“We welcome the opportunity to work with the FSA to consider such a proposal but we must ensure that it is simple and cost-effective. We do not believe a carbon copy of the existing IFA regime would be suitable for the mortgage market. It must be a clearer registration system but not one that adds more burden on intermediaries or IFAs who advise on mortgages and are already registered individually.”

A FSA spokeswoman admits it does not know how many individual mortgage brokers would be affected. She says the FSA is reviewing the proposal alongside a number of other options and an announcement is due by the first quarter of next year.

The move comes as part of the FSA’s crackdown on mortgage fraud. It revealed last week that it will be making targeted visits to 200 mortgage brokers. In the past 12 months, the FSA has banned 17 individuals and levied fines, including a £129,000 fine, for mortgage fraud.

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