RDR cannot be transferred to mortgage market - AMI

The Association of Mortgage Intermediaries (AMI) today warns a "read-across" of the RDR to the mortgage market without proper consultation could be dangerous for the industry.

In its response to the Retail Distribution Review (RDR), the AMI says the mortgage and investment markets are very different, and regulatory intervention is only justified in cases of market failure.

The RDR is mainly focused on the retail investment market but the FSA's Stephen Bland recently hinted an RDR-style review may be on the way for the mortgage arena.

AMI says it has submitted the response because it is concerned regulations for the investment market could creep into mortgage selling.

Richard Farr, director of AMI, says: “The document highlights the unique and highly successful nature of the UK mortgage market and seeks to demonstrate the potentially undesirable consequences of RDR read-across.

“AMI believes that solutions evolved for the investment market simply do not suit the distinctiveness of the mortgage market, and cautions that unintended consequences risk both destabilising and stifling innovation in the mortgage market.”

AMI says any proposed regulations for the mortgage market must be designed to address the specific issues which relate to mortgage selling.

Farr says mortgage intermediaries should currently stay focused on meeting the FSA’s TCF deadline of 31 March as the response period for the RDR will take some time.

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John Bakie
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