Clive Briault, FSA managing director for retail markets, said: "Our findings based on contact with more than 600 firms including 450 visits around the country are very encouraging. The vast majority of mortgage brokers are well informed about the need for them to be authorised by the FSA if they undertake regulated activities. We found only 11 brokers who should have been authorised, but were not. Seven of these have now applied for authorisation, and four are no longer undertaking regulated activities. This is a vital part of our work to protect homebuyers who do not have protection from regulation, or access to statutory redress and compensation, if they deal with unauthorised firms.
"We have also been impressed that lenders are refusing to deal with intermediary firms where they are uncertain about their authorisation status. The findings suggest that the mortgage sector is in good shape - but we are not complacent and will not relax our vigilance."
Michael Coogan, director general of the Council of Mortgage Lenders, welcomed the FSA's findings, saying: "These findings show that the industry is working closely with the FSA to achieve the shared objective of a robust regulatory system to protect consumers; we are pleased at the proportionate approach that the FSA has taken to this initial perimeter investigation."
The FSA will continue to follow up leads to track down and prevent firms operating illegally as well as undertaking perimeter work on the general insurance sector where a comparable exercise with firms has already begun.
The mortgage perimeter work raised two particular issues:
-Networks' control of their Appointed Representatives - Some firms are not keeping the FSA up-to-date with information and changes relating to their appointed representatives. This is leading to some confusion about whether these representatives are authorised. The FSA will be conducting some further work on this as part of its continuing supervisory work.
- Financial promotions - A number of introducer-only firms are describing themselves as 'independent mortgage advisers' in advertising or business stationery. The FSA has told the firms concerned to update or remove this incorrect material.
