Following the feedback the FCA said banks, non-banks and niche lenders all admitted this was the area which they were least ready for but the sentiment was strongest among the broker community.
Linda Woodall, director of mortgage and consumer lending of the FCA, said: “There is uncertainty among firms as to whether they are obligated to provide an execution-only option if their advice is rejected.
“We would like to confirm there is no obligation to for brokers or lenders to provide an execution-only method option but they are under no pressure to do so, they can simply withdraw from the sale.”
Intermediaries which responded to the online survey which was sent out to 5600 firms, a mixture of lenders and intermediaries, in May raised further areas of concern to the regulator.
Brokers indicated they wanted more information on disclosure requirements and evidencing the suitability of the mortgage product they have offered.
Woodall said: “We learnt a lot from the survey and on the whole we are happy with the progress being made to be ready for MMR. The main message we want to get across to firms is that we are here to help.”
The results of the survey will go on to form the next stage of work which will be half day workshops in October and November for all groups followed by face-to-face surgeries in February.
