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Regulation of Financial Services Bill
AIM
This bill will strenghthen the regulation of the financial service industry.

MAIN PROVISIONS
BILL'S PROGRESS
Responsible department: Treasury
Origin: House of Commons
Introduced: 25 May 2005
Second reading: 23 June 2005
Committee stage: 5 July 2005
Remaining stages: 20 July 2005
HOUSE OF LORDS
Introduced: 21 July 2005
Second reading: 17 October 2005
Committee stage: 23 November 2005
Third reading: 5 Dec 2005
ROYAL ASSENT
19 December 2005
  • Extends consumer protection to elderly homeowners considering releasing equity from their property via home reversion schemes
  • Creates more fairness in the equity release market in general, improving consumer confidence in these products
  • Provides better information to consumers about home finance products
  • FSA regulation will be extended to cover the growing market in Sharia-compliant home finance

    BACKGROUND
    The equity release market has soared in the last few years as the buoyant housing market has encouraged people to unlock the wealth in their homes.

    Currently only mortgage equity release schemes enjoy FSA protection.

    FSA protection will be extended, regulating the market and offering compensation where needed.

    Home reversion plans entail selling a property to a financial institution at below the market rate, releasing a cash lump sum and allowing the seller to live in their home until death.

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