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Ringing the register

Without a doubt, the new MCCB registration rules present greater demands

and requirements. And not before time, in my opinion.

Comparing the May 2000 document with this year&#39s new requirements, six

pages of rules have become 12 pages, and seven “definitions” have expanded

to 14. Has the MCCB deliberately doubled the content, with some masochistic

mathematical consistency? No. It is doing abso- lutely what it needs to.

When I wrote last year that it was time to “raise the drawbridge” and make

the mortgage advisory market much tougher to enter, I received several

vociferous and critical letters from brokers accusing me of “pi**ing in the

soup” by calling for tougher rules.

But for me, increasing regulatory requirements and a resultant raising of

standards is absolutely what the market needs. I believe the MCCB scored a

huge hit in hiring experienced industry executives such as Sue Scott,

formerly with Woolwich, and Richard Fox from Prudential Group who are legal

and policy director and compliance director of the MCCB. It is thanks to

such depth of industry and regulatory experience that results are being

seen. But major improvements in standards go hand in hand with increased


Here are some of the key changes contained in the new 14-page Registration

Rules document and an overview of the timetable.


This year&#39s MCCB application form now captures additional business

information from firms, so be prepared to provide more detail. This will

obviously enable more risk-based compliance monitoring of firms.


There is a small increase in fees which is described as a result of

increased “monitoring, investigatory and disciplinary activity”.

Amended rules

The new rules from May 1, 2001 have been amended principally to include

the fitness and competence requirements for registered mortgage advisers

and the fitness and propriety requirements for firms.

There is a new rule which means that MCCB registration automatically

lapses if either PI insurance or a CCL is not held.

You should, therefore, make absolutely certain that your CCL is

valid/current and that PI does not lapse, as any subsequent reinstatement

of your registration with MCCB is entirely at its discretion after any

deregistration of this nature.

Fitness and propriety rules will be introduced from May 1, 2001. The only

firms who will completely escape MCCB F&P rules are those already

authorised by the FSA.

But even these will have to demonstrate that their mortgage work is

managed and closely linked with the firm&#39s financial services operations.

All firms will, from May 1, 2001, have to meet the fitness and competence

requirements for RMA&#39s, including monitoring exam progress against the

December 2002 deadline.

From September 2001, firms must establish “competence levels” and

introduce formal supervision procedures for their RMAs.

At end of December 2001, the F&P rules are fully implemented and all RMAs

– new and old – have to meet the requirements.

Key aspects of competence requirements

Individuals of an MCCB-registered firm wishing to train to become RMAs are

to be known as trainee advisers. Much reference is made in the rules to

competence and competent.

Rather than a draconian prescriptive approach, you may find some comfort

in the fact that you specify your own competence level, “based upon the

scale and nature of the mortgage business undertaken” by your firm.

The MCCB provides guidance notes which give helpful information on the

main training and competence requirements, including:


Establish the skills of the applicant, his or her knowledge and

experience; their understanding of regulations and legislation; assess any

training that the applicant has received; verify any examination passes.


Ensure it is relevant and up to date. A competence programme could

include on-job training, attended interviews, review of cases, role plays,

review of fact-finds, analysis of failed sales and complaints.

Maintaining competence

Unlike earlier PIA/Lautro rules, a minimum “hours per year” threshold of

CPD activity is not essential. Set internal benchmarks to be undertaken by

RMAs and trainee advisers relevant to the scale of your mortgage activity.

Make and keep records applied in assessing continuing competence.

Supervision and monitoring

Establish a system of supervision and monitoring competence, which could

include ratio of sales to offers or completions, product confirmation

letter acceptance rates following supervisor checks and administration

error rates.

Intermediaries need to take the registration rules as seriously as the

code itself, as they are a fundamental part of the obligations. If in

doubt, call the MCCB helpline or take expert advice.


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