MI_13_regulation.qxd 27/2/09 11:08 Page 3
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common platform does not require firms to
allocate responsibility for apportionment and
oversight, as the governing functions basically
Questions
cover the responsibilities. If your firm meets the
criteria for the removal of the CF8 requirement
and, given what you say it would appear to do so,
you will actually have to apply to the FSA for its'
removal, it will not be automatically removed.
This is because there are certain firms, mostly
from hell
secondary insurance intermediaries, whose FSA-
regulated activities are not their main business.
For example, a motor dealer who sells insurance
policies on the cars he sells, as these businesses
do not have any one approved for other
'governing' functions, the CF8 requirement will
This month's
remain. SYSC chapters 4 to 10 in the FSA
The 'common-platform' has applied to firms handbook will provide more detail for you
Questions
covered by MIFID and the CRD (Capital should you need it.
Requirements Directive) since 1st November Q2. I understand from a competitor firm that
from Hell,
2007. Firms should read chapters 4-10 of the the FSA have queried via their RMAR return the
FSA's 'Senior Management Arrangements- period covered retrospectively by their PII policy.
tackles all
Systems and Controls (SYSC) sourcebook' They were authorised from 'Mortgage Day'
within the FSA Handbook to establish what is (midnight on 31/10/04) but their policy shows
your mortgage and GI
involved and how these change impact upon cover from 1/11/04 and the FSA have asked them
them. There are seven broad areas covered by the to confirm they didn't do any business in the
market regulatory
c
circle6
ommon platform: period before opening for business on the
circle6
Business structure and contingency planning 1/11/04. This seems very strange if true, which I
queries courtesy of circle6
Training, competence and expertise believe it is. Can you explain why they would do
circle6
Compliance, internal audit and financial crime this?
Bill Warren circle6
Risk control A2. It does seem very odd as, at the time, one
circle6
Outsourcing second past midnight on the 31/10/04 was when
mortgage regulation and authorisation started.
T
his year already looks like it's going circle6
Record keeping; and
Conflicts of interest. This is therefore 1/11/04 so I don't see what the
to be a long one for many firms In the two areas of outsourcing and the issue is.
and individuals with so much hap- management of conflicts the requirements are Q3. We as a firm have been considering
pening in the regulatory arena. new. entering into the 'Sale and Rent Back' market
The Competition Commission In addition to the above the last few days has and are at the stage of making a final decision.
published its final report into the brought the expected confirmation from the Can you tell us what we should do now to ensure
Payment Protection market at the Government and the FSA that Sale and Rent we are compliant with the very recent
very end of January, which principally resulted in Back providers will be regulated by the FSA from announcement that firms will need to be FSA
it setting out measures needed to increase the 1st July 2009. There is a great deal therefore at authorised?
competition between suppliers. present for the directors, owners and compliance A3. As you will know the Government want
Sadly aspects of the report demonstrated a lack teams within very many authorised firms to this area of business to be regulated very quickly
of understanding of what actually happens in the consider, implement if appropriate and to protect consumers. They have therefore agreed
market place, especially around the sales of ultimately pay for, in what has been repeated on that there will be a two-stage regulatory
Mortgage Payment Protection Insurance. As this numerous occasions' very difficult business approach adopted by the FSA to enable a
insurance is intended to protect those who might environments. The legislators no doubt would proposed start date of 1 July 2009 to enable
lose their jobs, particularly in the current call it continuous improvement. speedy cover for consumers. What this means is
economic environment, there appear to be some that existing Sale and Rent Back businesses can
who could lose out under the new rules, should Questions obtain FSA authorisation from 1/7/09, and
they be unfortunate enough to lose their jobs Q1. My firm is a medium-sized mortgage and continue to do business without going through
while in the process of arranging their mortgage general insurance business, which, like many, the full FSA authorisation process at that time.
finance. Fortunately, the FSA quite quickly issued seeks to remain compliant at all times and I and The second stage of authorisation will probably
helpful guidance relating to ICOBS and the my fellow directors/owners believe we take occur in the second half of 2010 at which time
Competition Commission's report. responsibility for what we do through our FSA firms will have to be processed via the full FSA
This report is just one of the major regulatory authorisation. I have held the Controlled authorisation process. So you can continue with
statements that have been issued or confirmation Function 8 (apportionment and oversight) your plans. I would recommend you read the
of key commencement dates for other changes among others since 'Mortgage Day'. I now hear FSA's consultation paper CP-9/6 that gives more
that perhaps haven't been so high profile in the this is going to be taken away from me by the detail than I can provide here.
trade press or elsewhere. On 1 April 2009 the FSA - can you explain why?
'common platform-organisational systems and A1. You are correct that CF8 will disappear You can contact Bill with your regulatory questions
controls' are extended to non-MIFID firms, i.e. from 1 April 2009 under the extension of the by emailing: bill@billwarrencompliance.co.uk
many mortgage and general insurance 'common-platform' as a result of MIFID and Bill Warren is managing director of
intermediaries. CRD implementation as mentioned above. The Bill Warren Compliance LLP
www.mortgageintroducer.com March 2009 Mortgage Introducer
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