Update on Mortgage Market Review (MMR)

The FCA published another update on the MMR last week, just reminding us of what it means in outline for firms.

I have  unashamedly lifted the text applicable to Mortgage Intermediaries from it and have included it below in italics.

The majority of the MMR changes come into effect on 26 April 2014.  Those that will be most relevant are:

For intermediaires

• The removal of the requirement on intermediaries to assess affordability.
• The removal of the non-advised sales process.
• Most interactive sales (e.g. face to face or telephone) to be advised.
• An 'execution only' sales process for non-interactive sales (internet and postal).
• Every seller required to hold a relevant mortgage qualification.
• It will no longer be compulsory to provide customers with an Initial Disclosure Document (but firms can continue to do this if they want to). Instead, certain key messages about a firm’s service must be given to customers.
• The Key Facts Illustration will not have to be given every time the firm provides the customer with information about a product that is specific to them.  Instead, it will only be required where a firm recommends a product or products, where the customer asks for a KFI, or where the customer has indicated what product they want in an execution-only sale.

The link to the full article is below:-

http://www.fca.org.uk/firms/firm-types/mortgage-brokers-and-home-finance-lenders/mortgage-market-review

I am not commenting on the MMR points in this blog as I am currently working on an implementation plan. I will comment as I progress. This blog is simply for information.

There is no feedback as yet on the MMR survey, which hopefully you all completed and submitted. Collation and analysis started at the FCA on 3rd June I believe and so we will hear from this in a month or so I would imagine. You will all be preparing your implementation plans  presumably (or preparing to do so). For my own clients, you will be receiving a copy of the implementation plan for your firm - you will need to tailor it slightly to your requirements and we can discuss that at the right time once you have  it.

For those of you who are not regular paid up clients, I can provide a copy of the plan to you at a cost (of course) and if you are interested, please email me at david.c.payne1@btinternet.com for more details. The plan will be available from 1st July.

Finally, on the basis of what's approaching and by when, please note the following two points also made in the article above.

Secured Loan Regulation

On 1st April 2014, responsibility for second charges will transfer to the FCA along with the wider remit of Consumer Credit Regulated loans. We already know that there is a need to apply for additional permissions for the CCA stuff and we are awaiting an action by the FCA on this in 'autumn' - their term, not mine . Presumably included in this will be  the ability to apply for permission to undertake second charge loans as they will be  FCA regulated from April 2014. It is a case of watch this space and the FCA web site on this one.

European Mortgage Credit Directive

The Mortgage Credit Directive is progressing and that will have implications for mortgages and credit sales in the UK at some time within the next two to three years. I see no point in focusing on this one at the present time as when I last looked, the Directive was not a 'done deal' as it were. We just need to be  aware that there are further potential changes waiting in the wings for after April 2014.

Modifications to Initial Disclosure document

Given that you have  six months from 1st April 2013 to modify out any references to the FSA or Financial Services Authority, don't forget that the former regulator is mentioned extensively in the Initial Disclosure Document (IDD and CIDD).

At first glance this may seem a relatively easy conversion but there are a few things to watch out for.

Firstly, the FCA CIDD / IDD template does not appear to have been updated from the old FSA one. At least it hadn't when  I looked a week ago.

Then there is the matter of the Register. The FCA uses the term Financial Services Register to designate the old FSA register so it is not just a simple change of 'Services' to 'Conduct' as it were. The web page for access is here: http://www.fca.org.uk/firms/systems-reporting/register

Finally, there is the matter of the address of the FS Register. The template gives it as www.fsa.gov.uk/register/   but if you attempt to access this then you will may, at the present time, fail to find the page. The actual address is : http://www.fsa.gov.uk/register/home.do

NB . Since identifying this  last point and publishing this blog post there appears to have been a change on the FCS site. The link www.fsa.gov.uk/register/ redirects to   http://www.fsa.gov.uk/register/home.do  and so now all is in order on this particular point.

Any of my clients wishing to sort this particular point out, please email me  a copy of your IDD or CIDD and I will update it  for you.

Don't forget that the issue of the CIDD is one of those matters for your MMR Implementation Plan and if you are one of my clients, I will be  contacting you very shortly about this.

FCA Logos & Photos

Please be aware that from 1st April 2014, you will not be able to use the FCA logo - or indeed the FSA logo at all , anywhere. Not on stationery, in adverts or web sites and not on business cards. The actual words used by the FCA on their web site (at this address - http://www.fca.org.uk/site-info/contact/logos-and-photos  ) are as follows:-

Regulated firms and other organisations (e.g. lawyers, auditors and event organisers), are not permitted to use the FCA logo on any of their documentation or promotional material. This includes firm’s mandatory regulatory status disclosure GEN 4.

The Financial Services Authority (FSA) logo should also be removed from all documentation.

You have until 1 April 2014 to  use up old stock and make the necessary changes  to your regulatory status disclosures GEN 4.

If you are dual regulated the required disclosure is ‘Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority’. If you are only regulated by us, the required disclosure is ‘Authorised and regulated by the Financial Conduct Authority’.

You are still permitted to use the Financial Ombudsman Logo however.

I am not sure how long this has been available to firms,  the web page states that it was published today but I know that it was available on Friday last week.

In simple terms and for whatever reason, you will have to get rid of any FSA logos before 31st March 2014.