Mortgage regulation

The Financial Services Authority recently issued Consultation Paper 70, “Mortgage Regulation: the FSA’s High Level Approach”.The mortgage market will also be affected by Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 and the provisions of the Consumer Credit Act 1974 and Unfair Terms in Consumer Contracts Regulation 1999 must be kept in mind. In this article James Perry and David Toube of Ashurst Morris Crisp navigate the legislation and draft regulations.

In April 1998, Helen Liddell, the then Economic Secretary to the Treasury, announced that HM Treasury was considering whether to give the Financial Services Authority the power to regulate the mortgage market. HM Treasury consulted on the regulatory options between July and October of 1999 and simultaneously, the FSA produced a cost-benefit analysis, which it published in October 1999. By January 2000, HM Treasury had announced the shape, at a high level of generality, that the forthcoming regulatory regime would take. It has now published “Regulating Mortgages” (www.hm-treasury.gov.uk/pdf/2000/mortgage2610.pdf) which contains the essence of proposals for how secondary legislation will be made under the Financial Services and Markets Act 2000 (FSMA) . Further details of how the FSA intends to operate the forthcoming regulatory regime are contained in Consultation Paper 70, “Mortgage Regulation: the FSA’s High Level Approach” (www.fsa.gov.uk/pubs/cp/CP70.pdf).