FCA sets out its MCD implementation plans

FCA sets out its MCD implementation plans

Firms looking to carry out second charge mortgage business can apply for permissions from 20 April as part of the EU mortgage credit directive implementation, the FCA has confirmed.

In the 319-page policy statement, Implementation of the Mortgage Credit Directive and the new regime for Second Charge Mortgages, Feedback to CP14/20 and Final Rules, the FCA encouraged advisers to apply as quickly as possible from this date.

The FCA revealed it would make a decision on whether to grant such permissions within six months of receiving a complete application or within 12 months of receiving an incomplete application.

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The regulator confirmed it would keep to its originally stated timetable by implementing advising and selling standards from 21 March 2016 while giving mortgage sellers until 21 September 2018 to obtain the required level three qualification.

Paul Broadhead, head of mortgage policy for the Building Societies Association, said: “The final rules published by the FCA do bring some clarity to the MCD ahead of implementation.

“However, lenders now face additional time pressures of applying these rule changes alongside all of the other regulatory changes.

“We hope that, once implemented, lenders can get back to focusing their energy on product development, innovation and serving their customers, rather than solely on regulatory issues.”

Earlier this year, the Treasury claimed implementing the regulations could cost intermediaries and lenders up to £22.8m.

Adviser view

Daniel Smethurst, director of Greater Manchester-based JonSimon Financial Advice, said: “It is good that the FCA is making sure any loopholes in the market are filled, but hopefully it will not cause too much disruption.”

Key dates related to the MCD implementation

20 April 2015: firms can apply for permissions regarding second charge mortgage business

21 March 2016: the FCA’s advising and selling standards are implemented

21 September 2018: the deadline for mortgage sellers looking to obtain the level three qualification

Source: FCA