December 11, 2015

Getting ready for MCD

Enterprise Finance’s Jackie Steel discusses all things compliance and what went in to preparing the Specialist Finance Distributor for obtaining its variation of permissions from the FCA ahead of the MCD deadline.

Since I joined Enterprise Finance at the beginning of 2014, there have been a number of notable milestones from a compliance point of view, both internally and externally. The first item to prepare was on the dissolution of the Office of Fair Trading and the subsequent transfer of regulation of second charge mortgages to the Financial Conduct Authority (FCA). This represented the initial step on the road towards bringing secured loans from the consumer credit regime into the main home loan rules and the European Mortgage Credit Directive (MCD), a journey that will take us through to implementation in March and the new regime beyond that.

Other early compliance projects last year included our acquisition of West One Loan Limited and the subsequent integration of compliance processes that followed.

But it has been the MCD project that has dominated much of our thoughts in the compliance department and we are keen to ensure everything is implemented well in advance of the March 2016 deadline. We took our initial plan to the board at the beginning of 2015, before spending three months preparing and finessing what our final submission to the regulator might look like. Having submitted our application to vary our permissions to the FCA in mid-June, we received confirmation that we had been successful just 11 weeks later at the end of August.

But far from that being the end of the journey, official notification from the regulator merely marks the latest signpost along the way. Between now and March, much of our focus will be on getting advisers ready for the new regime through training, testing and roleplaying. As much as you can prepare for the new regime and understand the objectives of the new legislation, it’s only when you walk through the different eventualities that the various issues that may arise come to light, so it’s important that intermediaries consider this in advance.

A lot of what we do in compliance boils down to simply ‘doing the right thing’. Having started my career on the advisory side of financial services, what attracted me to specialising in compliance more than 15 years ago was seeing how I could help put things right and a genuine desire to help and protect the end consumer. We talk a lot at Enterprise about good behaviour breeding good behaviour and we have a healthy culture where there is continuous interaction between the compliance department and the business. There should be a culture where employees have a desire to want to be proactive in their diligence, rather than waiting for compliance to approach them.

In compliance the job is never completely finished as there are always new legislative changes to be aware of and cases to learn from and intermediaries can be rest assured that even once next March’s MCD implementation date has been and gone, we will still be on hand to educate and advise on compliance matters so we can help them help their clients.

This article first appeared on Mortgage Solutions