Clive Briault, FSA managing director for retail markets, said its findings, based on contact with more than 600 firms including 450 visits around the country, are encouraging.
He said the vast majority of mortgage brokers are well informed about the need for them to be authorised by the FSA if they undertake regulated activities.
The FSA only found 11 brokers who should have been authorised but were not. Seven of these have now applied for authorisation, and four are no longer undertaking regulated activities.
Briault added: “We have also been impressed that lenders are refusing to deal with intermediary firms where they are uncertain about their authorisation status.
“The findings suggest that the mortgage sector is in good shape – but we are not complacent and will not relax our vigilance.”
The mortgage perimeter work raised two particular issues. It found that some networks are not keeping the FSA up-to-date with information and changes relating to their appointed representatives (ARs).
This is leading to some confusion about whether these ARs are authorised. The FSA will be conducting some further work on this as part of its continuing supervisory work.
In addition, a number of introducer-only firms are describing themselves as ‘independent mortgage advisers’ in advertising or business stationery. The FSA has told the firms concerned to update or remove this incorrect material.
Richard Fox, chief executive of the Society of Mortgage Professionals, commented: “Of those that did not get authorised, it must be deemed if this was a technical error or a deliberate case of flouting the rules.
“If it was the latter then I would expect the firms to be taken to court. It is important to make firms aware that there are penalties for non-compliance.”
