FSA sees off 600 rogue firms since regulation
FSA records show that, at the first stage of the authorisation process, approximately 550 mortgage and GI firms either withdrew or were refused permission to conduct business. At the second stage of the process, where firms can appeal to the Regulatory Decisions Committee (RDC), approximately 60 firms withdrew or were refused. The Tribunal is the third and final part of the process and 11 firms have withdrawn or been refused at that point.
Andrew Honey, head of insurance in the small firms division at the FSA, said: “One year on from mortgage regulation and nearing the anniversary of GI regulation, this is good news for the industry. It is essential unfit firms are kept out to ensure there is a level playing field for the benefit of intermediaries. It also provides crucial protection for consumers.”
Firms are refused authorisation for failing to disclose information which includes previous convictions, issues with previous regulatory bodies and a lack of appropriate management or systems and controls.
Chris Cummings, director-general of the Association of Mortgage Intermediaries (AMI), said: “Nobody welcomes such radical action but it is somewhat inevitable. It would be interesting to see the breakdown of firms that withdrew from the market and while the number seems high you have to take into account the FSA’s authorisation of over 7,000 mortgage firms and a further 18,000 GI companies.”
Rob Clifford, managing director of Mortgageforce, agreed: “The MCCB saw the back of a similar number of firms and it’s great to see the regulator is keeping up the barriers for entry.”