The Association of Mortgage Intermediaries (Ami) says that, with the Financial Conduct Authority (FCA) expecting implementation plans on the new consumer duty rules by the end of October 2022, firms should “start work on this now.”
Regarding the new rules, published today, Ami says it is pleased to see the implementation period of 12 months and 24 months for existing products and services and those closed, respectively.
The association also cheers given clarity on roles and responsibilities, “and the level at which fair value assessments should be conducted.”
Ami explains: “[The] FCA has clarified that firms are responsible only for their own activities and do not need to oversee the actions of other firms in the distribution chain, with firms only responsible for the prices that they control.
“Fair value assessments (under the price and value outcome) sit at a product or service level and not at individual customer level.”
Additionally, Ami says the addition of the word ‘causing’ in the rule ‘avoid causing foreseeable harm’ means the risk of firms being liable for harm outside of their responsibility or control is now mitigated.
Chief executive Robert Sinclair comments: “Ami played a key role in engaging with the regulator, other industry trade bodies and member firms to ensure the mortgage intermediary voice was heard on one of the biggest regulatory changes the financial services sector has seen within the last decade.
“The implementation timeframes will be tough, with the FCA expecting by end of October 2022 firms will have agreed their implementation plans and how they will oversee delivery of the new rules.
“It’s therefore important for firms to start work on this now. Ami will help and support member firms to interpret and understand the implications on our sector and plan to work with our lender trade bodies to understand roles and responsibilities, including how we might be able to standardise lender disclosure of product fair value.
“We are generally pleased with the outcome but as always, the devil is in the detail and we are in the process of reviewing the final rules and guidance. Much will depend on how this is supervised and how FOS deal with this new principle. Ami will remain alive to how these develop.”
