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Applause as introducers are omitted from rules

Lenders and IFAs have given a mixed response to the publication of the Treasury&#39s final rules and regulations for the mortgage market following a consultation process which started in February.

Most welcome the clarification on how advice is defined and who will fall under the FSA regime from 2004. But there are warnings that the details which the regulator is drawing up will require careful inspection.

One of the key outcomes of the Treasury&#39s mortgage regulation consultation paper is that introducers, including builders and estate agents, will escape regulation if they refer potential borrowers to an authorised person, such as an IFA or appointed rep.

The CML says it has “always strongly argued for proportionate regulation” and supports this decision.

Britannic Money says the Treasury has clearly listened to arguments that regulating introducers would put a big burden on firms and the FSA. It says this is perhaps a signal that mortgage regulation will not mirror the investment advice regime.

Based on feedback, the Treasury has stuck to its original view that strategic or general advice unrelated to a specific lender or product will fall outside the FSA&#39s remit, as will execution-only products.

Treasury financial secretary Ruth Kelly says: “Buying a mortgage is the biggest financial decision that most people will ever make. It is vital that people make the right choice and these regulations will make it easier to do that.”

Britannic Money strategic development manager James Mayne says: “It is apparent that the Treasury has taken respondents&#39 views into account and the consultation process works. But as we know, the devil is in the detail so we now must await to read how the FSA intends to interpret these new powers.”


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