FSA approved persons regime on way out?
The FSA is proposing to get rid of its approved persons system – used by the regulator to approve all individuals it regulates – for wholesale markets, including City and investment workers. Instead, it will be left to the employers of these firms to approve the individuals who work for them.
Industry commentators believe that the same concession should, and would, be likely to be given to the mortgage and GI market in time.
Robin Gordon-Walker, spokesperson for the FSA, said: “We published a consultation paper last July proposing to remove our approved persons regime for wholesale. We are putting the onus on them to approve their people, which is what most people would want to do anyway. Would you want to employ incompetent staff?
“But we are keeping it for the retail market, including mortgages. To say we will remove it for mortgages is a jump too far. Because retail customers are less experienced and may only get a mortgage once in a lifetime, there is a greater risk of mis-selling.”
But Kevin Morgan, managing director of Consilium Financial Planning, believes that inevitably when the industry evolves and mortgage regulation beds in more, the FSA will implement the same concession across the board. He said: “Anything that leads to a lighter touch on regulation has to be good. If the FSA has the mindset to treat people with a little more confidence, we have to show that we merit this.”
Bill Warren, director of The Complete Network, commented: “Ultimately, we would like to see a level playing field. It is early and the FSA does not really know the individuals in the mortgage market, but in about three years it could start to adopt the same approach for our market.”