MI_29-30_equity release.qxd 27/2/09 11:23 Page 3
Equity release | 29
Removing
risks
Bridgewater's
Alison
Beeston
looks at the
new Sale and Rentback
legislation being
fast-tracked through
Parliament
ast month's publication of an latory headlines in recent times because of their in skeleton regulations in order to speed up the
L
FSA Consultation Paper on the potential to prey on vulnerable customers. The process towards full regulation. As an interest-
regulation of Sale and Rentback economic situation we currently find ourselves ing side-point, this is the first time the FSA has
(SRB) schemes was a major step in suggests the risks are now even greater and ever attempted a two-stage regime, so it will be
in the right direction for clean- both the FSA's consultation and the OFT interesting to see how this works. Overall, the
ing up a sector which has been report acknowledge this. and interim requirements are pretty robust and
severely tarnished. Indeed, the Rentback they in themselves will probably be enough to
regulator itself is so concerned about the Rising unemployment, the growing cost of put off those providers who are less than com-
possible detriment to consumers who may mortgages for those needing to remortgage, the mitted to the market. The requirements for
be opting for SRB it has effectively fast- fundamental difficulties in getting credit and regulated SRB providers include: manage-
tracked regulation. Moving to full statutory falling property prices have led to a well-publi- ment/annual accounts; business and financial
regulation often takes a considerable amount cised increase in evictions. It is commonly plans; details of IT systems; business continuity
of time but following the Office of Fair those facing this situation that consider these and disaster recovery plans; sales procedures,
Trading's (OFT) report and recommenda- schemes as a last resort and therefore need pro- and source of funding and compliance plans, to
tions the FSA is planning to establish an tection. name but a few. Quite an undertaking for any
interim regime from July this year, subject to firm especially for those small firms operating
Treasury legislation change dates, followed Protection in a small market.
by the full regulatory nine yards from most So, what exactly is the FSA proposing and what Applications for authorisation will need to
likely Quarter 2 next year. protections is it affording consumers within its be submitted within a one-month 'time win-
SRB schemes, and the companies that offer 'two-regime' process? Firstly, the interim regu- dow' so the applicants will certainly need to be
them, have hogged both the financial and regu- lation planned to commence in July will bring organised. Once this window is shut no ne
© Rr
w
ocio
www.mortgageintroducer.com March 2009 Mortgage Introducer
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