Questions from Hell

FSA got it right over quality, clarity and fairness for clients

In this new political dawn there are still challenges ahead for intermediaries as lenders seek to defend themselves

by

Bill Warren,

managing director, Bill Warren Compliance LLP

With the new political arrangements starting on the road to hopefully delivering the stability needed in partnership with rebuilding the uK’s credibility in certain areas, perhaps the financial services industry can now concentrate on its own particular challenges. What has not yet gone

away, if it ever will, is the need felt in certain quarters to perpetuate the ‘intermediary knocking’ season. the blame

Q

culture still remains as lenders seek to continually defend themselves. the most recent examples have seen both the regular building society conference and the council of mortgage Lenders turning their fire on the intermediary sector. You can naturally feel the frustration from the lenders surfacing after over two years of being blamed for creating the credit crunch at one end and the political and financial changes needed at another. to blame or suggest responsibility should fall on the intermediary sector for the actions of many lenders eager to sustain market share leading up to the

Are we alone as a mortgage and general insurance firm in believing that legislation requires us to make checks on individuals relating to Financial Sanctions when we consider a mortgage enquiry or protection insurance cover? We have seen more references to financial sanctions within the press, the FSA’s public notices and general anti-money laundering requirements recently. Can you clarify our responsibilities and on what basis we should be doing this?

A

Not a simple answer to this one; you are correct in that you do have a

responsibility to check the Financial Sanctions Register, ideally each time you ‘take on’ a new client. The responsibility forms part of the government’s anti-money laundering finance strategy, which was launched in February 2007 as part of the country’s response to the financing of terrorism by various means. In October 2007 the Treasury set up a dedicated Asset Freezing Unit. The Unit’s brief amongst other things was to set up and maintain a ‘target list’ available to the public which it did on its website. This is updated

credit crunch seems a little unfair. the easy availability of funds with little obvious consideration for risk can hardly be the fault of the intermediary in their distributing role. the consumer has a right

to expect quality whether they trade directly with a lender or seek the services of an intermediary, which makes the recent comments from the cmL just as frustrating. the comments which

have formed part of the cmL’s considered response to the FSa’s new approved persons requirements for mortgage advisers within both the intermediary and

on a regular basis (last update was 4th May 2010). The FSA responded re-stating its support for the anti-money laundering and terrorist legislation. It issued guidance to firms, which included this key statement: ‘Firms’ systems and controls are integral to the FSA’s requirements on financial crime’. It supported this by carrying out research, which confirmed the need for all firms to exercise caution and deliver systems and controls to protect them from being used to further financial crime. They further commented that, ‘whilst there is no specific legal obligation (from FSA) to screen individuals on the financial sanctions list at take on’ it would be difficult for firms to comply with the wider legislation if they didn’t carry out checks. For those firms that don’t carry out financial sanctions list checks and want to there are firms who offer this service - Linksfield Technologies, for example, www.linksfield. com/financialsanctions offer simple access to the register and Veriphy Systems Ltd www. veriphy.co.uk offer this check as part of their complete anti-money laundering checks.

The FSA proposal likely to be confirmed shortly and implemented Q4 this year or Q1 2011 I estimate, is that mortgage firms (lenders & intermediaries) must have an approved person holding their CF10 controlled function i.e. compliance responsibility amongst the firms owners/ senior managers, while advisers must have the CF31 controlled function. The individuals must meet the FSA’s approved persons criteria, basically meeting the fit and proper requirements and also being able to show demonstrable competence.

Q A

The Bribery Act received Royal Assent in April and becomes effective end Q3/ early Q4 2010 and yes it does apply to firms providing advice.

Q A

16 mortgage introducer JUNE 2010

I am told there is a new Act of Parliament relating to bribery - when does it become law and does it apply to ‘advising firms’?

lender sectors, have been interpreted by some as the lenders seeking to avoid both the responsibility tag but also the opportunity to enhance, even repair, the public image and professionalism of mortgage advisers at a crucial time. it is true that different providers and intermediaries have differing business models and attitudes to generating business and regulation should respect this to a certain extent, but surely the need for quality and clarity, not forgetting fairness, should be paramount in the eyes of the consumer. in this sense many believe the FSa has got it right.

My compliance manager keeps telling me we need to obtain approved persons status for our advisers shortly and himself. What are the requirements? Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48