Prudential Regulation Authority Rulebook

The Guide to the FSA Handbook for Small Mortgage and Insurance Intermediaries (The Guide) is primarily intended for small intermediary firms carrying on:from a permanent place of business in the UK.

From 31 October 2004 (known as 'NM') we (the FSA) will be responsible for regulating mortgage intermediaries, and from 14 January 2005 (known as 'NGI') we will regulate insurance intermediaries. This Guide will help small mortgage intermediaries and insurance intermediaries who are authorised by us or have decided to seek authorisation to find the rules in the FSA Handbook of rules and guidance (the Handbook) that apply to them. The Guide refers to and contains extracts from various parts of the Handbook. Firms should consult the Handbook to determine the precise wording and effect of the rules. In addition, firms may need to refer to the Financial Services and Markets Act 2000 (the Act).

Not every mortgage or insurance intermediary does identical business or is permitted to carry on the same type of activities. This Guide directs firms to those parts of the Handbook that will usually be relevant to typical small mortgage and insurance intermediaries that have simple organisational structures and do not carry on any regulated activities other than mortgage or insurance mediation activities.

As well as firms whose principal business is carrying on insurance mediation activities, this Guide will also help small firms carrying on insurance mediation activities as a secondary activity, provided that their main business is not regulated by us. This would include, for example, mobile phone retailers who also sell mobile phone insurance but no other kinds of insurance.

Some aspects of the Handbook do not apply to small firms and so are not covered in any detail, if at all, in this Guide. As such, if your firm is large, or has a complex organisational structure, there may be other rules that apply to you that are not referred to in the Guide.

Similarly, the Guide does not cover many of the rules that apply to firms that are authorised or require authorisation for investment business, such as IFAs and firms that carry on insurance mediation activities in relation to life policies. Nor does it cover many of the rules that apply to insurance companies and mortgage lenders. These firms will need to consult other sources of information to identify the rules that apply to them. Small IFAs might find the FSA guide Using the FSA Handbook: an overview for small IFA firms helpful.

Although the Guide is primarily intended for authorised firms, we are aware that many small firms carrying on mortgage or insurance mediation will decide to become appointed representatives (ARs). Part I, Chapter 9 of the Guide explains how ARs carrying on these regulated activities are regulated, and there are references elsewhere in the Guide to some of the requirements that apply either to ARs directly or to firms with ARs. However, the Guide does not cover all of the rules that apply to networks and other firms with ARs.

Whether or not you are a small mortgage intermediary or insurance intermediary, this Guide is only a tool to help you access the Handbook and to find the rules that are relevant to your firm. It is not a substitute for reading the rules themselves and is not a comprehensive statement of your firms' obligations under our rules. It should be used to help guide you through the most relevant aspects of our regulatory regime and is designed to make accessing and understanding the content of the Handbook easier.

The Guide is not formal guidance and does not have the status of guidance in the Handbook. You cannot use the Guide to counter a charge of breaking our rules. In the event of any conflict between the Guide and the Handbook, the Handbook takes precedence.

The Guide is current as at 31 March 2004. The Guide does not remove the need for firms to keep up to date with regulatory developments and to consider the potential impact on business of proposed changes. We will regularly update the Guide but we will not update it each time the Handbook changes.

The Guide is in three Parts:

The Guide is grouped into chapters covering the most frequent types of interaction with us and the rules that most often apply to mortgage and insurance intermediaries. The references to the Handbook and the pointers to other sections within the Guide itself are not intended to be exhaustive.

The Guide uses terms that are consistent with those defined in the Handbook Glossary. These terms are in italics in the Handbook (though not in this Guide). To help you Appendix A to this Part contains brief definitions of some of the terms we use throughout the Guide. Appendix A to Parts II and III also contain definitions of some of the terms used frequently in those Parts. In each case firms should consult the Handbook Glossary for the full definitions.