Consumers will tend to use an intermediary to help them choose and take out a mortgage. The services provided by these mortgage brokers may be provided on both an advised and non-advised basis but will require authorisation from the Financial Conduct Authority (FCA) unless an exemption or exclusion applies.
Mortgage brokers that are authorised by the FCA then need to comply with specific rules when providing those services to ensure they maintain compliance. As a firm that’s either considering becoming a mortgage broker or already authorised as one, you should be aware of the FCA rules that apply. The rules on how you are expected to conduct your activity can largely be found in the FCA’s Mortgages and Home Finance: Conduct of Business Sourcebook (referred to as ‘MCOB’). There are also additional FCA rules that apply to all firms, including the complaint handling rules and rules on the Senior Managers and Certification Regime (SM&CR).
You should also be aware of how the different permissions apply to enable mortgage brokers to take different steps when providing its services to customers, such as by providing advice or not. Certain systems and controls should also be in place depending on a firm’s permissions to ensure that they do not breach the rules or operate outside of their permitted activities.
Mortgage brokers seeking FCA authorisation require a coherent compliance monitoring framework and must be able to demonstrate that the business model is one that meets the FCA’s requirements. They should also be aware of specific requirements that must be satisfied to become authorised including the need for Professional Indemnity Insurance and a minimum capital resource requirement. Those in control or who will have management responsibilities within the firm must also be suitable and appropriate.
Appointed Representatives and Principal Firms
Firms that become authorised by the FCA may extend authorised permissions to third party firms. These are known as ‘Appointed Representatives’.
Firms that become authorised by the FCA may extend authorised permissions to third party firms. These are known as ‘Appointed Representatives’. In having an AR, an authorised firm would be understood as the Principal firm. Many firms start as Appointed Representatives before seeking direct authorisation from the FCA.
How can MEMA help you?
Interested in becoming authorised by the FCA or maintaining compliance as an FCA authorised firm? MEMA can help, whether it is for FCA authorisations, or ongoing compliance needs.
Ongoing FCA Compliance
As an FCA authorised person or firm, you might need help to ensure you comply with the FCA’s rules.
We provide our clients with support they need to maintain compliance and avoid breaching the rules. Our bespoke service is individually tailored to each of our client’s requirements and objectives to help them meet in the best way possible.
Whether you need documentation to help you remain compliant, want ongoing advice or support, impartial monitoring of your activities or anything else, MEMA may be able to help.
Why Choose MEMA?
MEMA has been supporting firms through the FCA compliance process since 2019. In that time, we have helped hundreds of businesses to successfully gain and retain FCA authorisation.
We have a unique blend of experience from ex-regulators, big 4 consultants and fin/regtech specialisation. Our team is highly experienced and expertly skilled. We specialise in providing our clients with solutions to often complex regulatory requirements and compliance needs.
Our unique industry insight and comfort with compliance enables our team to support you to the fullest extent possible, helping to develop your business model and compliance.