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‘FSA should not wait for EU on regulation’

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The FSA says it is right to press ahead with its reform of the mortgage market despite the European Union having yet to finalise its own Europe-wide mortgage market rules.

In March, the European Commission set out draft rules for a directive on mortgage lending to standardise and improve lending and borrowing practices across member states.

Speaking at the Building Societies Association annual conference in Birmingham today, FSA director of conduct policy Sheila Nicoll said it is important European regulation does not stifle individual markets.

She said: “We all have an interest in ensuring a robust check on affordability in every case. But what we also need – and it is encouraging to see the European Commission and the Financial Stability Board recognising this – is for the beneficial diversity and effective operation of national markets to be ensured.”

She added: “We also think moves to strengthen protection in the UK market should not necessarily have to wait for EU and international changes, which could take many years.”

Also speaking at the conference, European Mortgage Federation senior legal adviser Jennifer Johnson said the EU’s rules will not achieve what they were drawn up to do.

She said: “We are concerned that the text that we have in front of us is not fit for purpose and will not actually meet the objectives it is supposed to fulfil.”

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. The FSA are concerned that the text that they have in front of them is not fit for purpose and will not actually meet the objectives it is supposed to fulfil.

    We have been telling them that about the RDR.
    I don’t suppose she sees the irony.

  2. IFA Defence Union 4th May 2011 at 5:14 pm

    No, the FSA shouldn’t wait, it should shut up shop now before it does any more damage.

  3. Simon Mansell 4th May 2011 at 5:30 pm

    Hang on the FSA reckons on a £1.7b RDR spend and this could be undone by the EU and the FSA is saying it should not wait – thats about as daft as the FSA having a fine art collection!

    European Union law operates alongside the legal systems of the European Union’s member states and where conflict occurs, takes precedence over national law.

    Does such RDR conflict with EU law exist? All 3 aspects of the RDR – prescribing the conditions for a firm being able to hold itself out as “independent”; prescribing methods of remuneration; prescribing criteria for competence – are super-equivalent to comparable provisions in the Markets in Financial Instruments Directive aka (MiFID).

    Under EU law super-equivalence is not permitted, which is why the FSA are unable to apply their proposed rules to inwardly passporting firms, as this would bring the FSA into direct contravention of Article 31 of the L1 Directive (2004/39/EC). NB: Firms passport into the UK from the EU just as UK firms can passport into EU states via the UK. This two way traffic is the corner stone of EU law and the principle of trading harmony.

  4. Was’nt it the FSA who were described as ‘unfit for purpose’ by the current Government?

    Which is why they are being closed down. (not soon enough in most people’s opinion)

  5. Julian Stevens 5th May 2011 at 5:59 pm

    The FSA always says it’s right about everything yet, when it fails to fulfil its statutory objectives, we never get an apology or an admission to having screwed up. That’s just the way things are, which is why we need an Independent Regulatory Oversight Committee charged with holding the FSA to the spirit and to the letter of the Statutory Code of Practice For Regulators. What are you doing about it AIFA?

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