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FSA may regulate every individual mortgage broker

The FSA is considering regulating every single 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 all subject to the same official checks as investment advisers.

The proposals could also see the 7,078 IFA firms who offer mortgage advice forced to apply for approved person status for mortgages.

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

A FSA spokeswoman admits that it does not know how many individual mortgage brokers the plans would effect.

She says the FSA is currently reviewing the proposal alongside a number of other options and an announcement is due by Q1 next year.

The move comes as part of the FSA’s crackdown on mortgage fraud. It revealed earlier this week that it would be making targeted visits to 200 mortgage brokers.

Compliance consultant Adam Samuel says this move will make it easier for the FSA to take actions against individuals. As an approved person, the regulator can personally fine and discipline each individual.

He says: “The FSA is obviously annoyed. It is very hard for it to turn a blind eye to fraud. It should have done this before now.”


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