Regulator targets 16 networks
MI revealed in December that the FSA was to issue further guidance to networks in 2006 amid concerns they are not controlling their ARs in accordance with its rules.
A survey conducted by the FSA found a number of potential shortcomings in areas such as the level of compliance resource in Principal firms, the quality of desk checks and field visits to check ARs’ compliance, the use of computer systems for monitoring ARs and how far networks operated a risk-based approach to monitoring of ARs.
A source close to the FSA said he is aware the regulator is currently requesting new data from 16 networks, including a breakdown of their sales and incentives given to advisers. He said: “It is well known now that the FSA is concerned about networks. It is not clear if these networks have just been randomly chosen or the FSA is particularly concerned about them.”
Stephen Atkins, group compliance director at Freedom Finance, told Mortgage Introducer the regulator had stated it ‘means business’ this year and will be issuing enforcement action against those firms that are not towing the line.
Tony Jones, managing director of Pink Home Loans, said: “We were not aware the FSA is looking at 16 networks. But with the extra guidelines it is putting out for networks, it makes sense. Things will hot up on the compliance front this year.”
Robin Gordon-Walker, spokesperson for the FSA, said: “Last year we undertook work to look at the way mortgage, general insurance and investment networks were controlling their ARs. But these things are never closed. It is ongoing work.”