The draft Order:
- Clarifies the correct regulatory treatment under the Financial Services and Markets Act 2000 (FSMA) for a small number of first charge mortgages dating from before 31 October 2014.
- Makes supplementary changes necessary to ensure that the legislative changes to the regulatory regime for mortgages resulting from the implementation of the Mortgage Credit Directive (MCD) achieve the government’s policy aims.
The explanatory memorandum states that, after the general election, the Government resumed its consultation with industry to understand their emerging plans for compliance with MCD requirements and to support their transition to the new regulatory framework. It emerged that there were several issues that had not been previously identified which required further legislative change to ensure the Government’s policy aims are fully achieved and the regulatory requirements are clear.