The regulator said it was looking at the implications of the move towards a principles-based regime on the MCOB rules and it would be making adjustments to make interpreting the two areas simpler for the industry.
However, speaking at the Council of Mortgage Lenders’ (CML) annual conference, Dan Waters, director of retail policy division at the FSA, said it wouldn’t change the rules if it meant compromising an area which was performing well.
“In the light of the imminent simplification of COB and ICOB, and our commitment to a more principles-based approach to regulation, it would be inconsistent not to at least open the discussion about principles-based regulation to include MCOB. Where we think things are working, we won’t – at the moment – be looking to change them. This seems entirely sensible, and I hope you’ll agree, ‘if it ain’t broke, don’t fix it’.”
Despite this, Waters warned there were areas which it would be looking at in the second stage of its ‘Better Regulation’ review, including the non-conforming and lifetime markets and how lenders treated borrowers in arrears.
But he insisted the FSA’s aim was to make things simpler. “Firms who demonstrate they are getting it right by themselves will need less attention from us, and so will be rewarded with less regulatory intervention. I think this illustrates that there is a bargain to be struck here between the industry and FSA as regulator.”
Tony Catt, a sole broker, said: “It’s welcome news as it is trying to have some common sense in admitting that it doesn’t need to be involved in absolutely everything. However, there are things which it should be taking a closer look at which it isn’t.”
