Once they lift the lid on their own business and try to examine how it measures up, the workload involved soon becomes apparent.
TCF is no longer the cuddly bear sitting in the corner that everyone at first thought, and despite loud and clear proclamations from a number of interested parties as to the effort needed to be compliant, it is only now that firms really realise this is not something they can fudge.
The problem that many have is not only in understanding exactly what sort of information and records they need, but also in getting a handle on how they can then use this to prove they are acting compliantly.
This is exactly where AMI believes its working party will help. The party will be led by Richard Farr, director of AMI, and includes industry figures such as Patrick Bunton of London and Country and Kay Leslie of Pink Home Loans.
Discussing how the working party will operate and the benefits it will bring, Farr says: “The working party will provide a forum to discuss the key TCF issues facing members.
We will be working very closely with the FSA over the coming months up to the 31 March deadline and beyond. We aim to discuss and agree the management information requirements for small and large firms alike and to clarify the requirements for intermediaries. AMI feels strongly that the FSA’s TCF proposals are currently too ambiguous.”
Looking at the issue of management information and its use, Farr added: “While many firms collect and review management information it is not always evident how they put it into practice. Firms must be able to demonstrate they are using this information, and the FSA has said that it will take action against firms that do not comply.”
Some have claimed the fact that AMI has set up initiatives to deliver clearer TCF information to brokers proves the FSA is not doing its job.
Others feel that there is a limit as to how far the regulator’s responsibilities stretch and having set out its stall, it is up to the market to best establish how it can then work to meet the requirements as fits the needs of each and every company.
Certainly the regulator has stated it is prepared to work closely with firms, although it will not spoon-feed them. As Delfas comments: “Interaction with the FSA can really kick-start a programme.” The implication is that effort has to be made on both sides and given the market is moving to a principles-based regime, getting it right with TCF will help hugely when it comes to being compliant in the future. Page 3
