I promised to provide a written response to the questions on FSA recognition from Jim Cousins at my appearance in front of the Committee on 20 May 2008 (Q288 and Q289).

  The questions asked about the number of staff who have FSA recognition. We can confirm that the number of persons authorised at Northern Rock under the FSA's approved persons regime has not changed materially since August 2007. However, I think that the questions did not refer to this but rather to the "SA Training and Competence (T&C) regime and therefore related to the number of staff at Northern Rock who are able to sell mortgage loans.

  As mortgages are a regulated loan product, in accordance with FSA requirements Northern Rock operates a T&C regime for all employees who sell mortgages to customers. This T&C regime requires each seller to continue to demonstrate sales and compliance competency through conducting regular loan interviews with customers.

  The very significant reduction in new mortgage business levels at Northern Rock has resulted in a corresponding fall in the number of loan interviews being undertaken. As a result it has been impossible for the same number of staff to demonstrate and maintain competency under the T&C regime as before the drop in new business levels.

  However, this does not impact on their job prospects either with Northern Rock or with other organisations. If any of these staff were to seek alternative employment, they would be able to sell regulated loan products subject to receiving training and supervision from their new employer. This is standard practice to meet FSA requirements and would be the case irrespective of their current adviser status with Northern Rock. They would also retain any relevant qualifications they had gained related to mortgage sales, such as the Certificate in Mortgage Advice and Practice (CeMAP).

  I hope this clarifies the position.

Ron Sandler

Chairman

5 June 2008