The Financial Services Authority (FSA) has published the final rules for the regulation of home reversion plans and Shariah compliant home purchase plans.
Both are due to become regulated products on 6 April 2007 with the FSA accepting applications for authorisation to advice on both products from 6 November.
The regulator says the rules have been designed to ensure people who wish to take out either product are given the same consumer protections as those already in place for equivalent products - lifetime mortgages and conventional mortgages - which will have been regulated by the City Watchdog for two years on November 1.
The FSA has already published details of the authorisation process on its web-site. There will also be an interim authorisation regime for firms whose applications have not been processed before the start of regulation, provided they meet the relevant criteria.
Dan Waters, FSA director of retail policy, says: "Regulation of these sale and lease arrangements introduces important new protections for consumers in the housing market. It will help older consumers looking to release equity from their homes by extending protection over both sectors of the equity release market. It will also ensure fairer treatment for consumers wanting to buy their homes in way that is compliant with Islamic law, building on the work that we have already done in the field of Islamic financial services to improve consumer access to these products.
"Regulation is only five months away and firms need to make sure that they are fully prepared. We start accepting applications from November 6 and firms are advised to apply early to ensure that they are ready in good time for the start of the new regimes next April."
The rules include the final fees rules for firms wishing to advise on either home reversion plans or home purchase plans. The final reporting requirements will be published next month.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Matthew West on 020 7484 9893 or email [email protected].IFAonline
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