Row over FSA changes for quitting companies
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The FSA has denied that it has changed the regulatory requirements for firms leaving the industry despite significant changes to its cancellation of the part IV permissions form.
The latest version of the form on the FSA’s website shows material differences to the older version of the form dated July 2007. The earlier form does not list specific questions on transfer of assets, arrangements to deal with outstanding and future complaints and whether the firm has run-off professional indemnity cover. But these questions are included in the latest version.
There is also an information box in the newer form that details a firm’s responsibilities and liabilities in ensuring appropriate asset transfers that does not appear in the older document.
An FSA spokesman says: “The questions that have been added were always asked bef-ore but were asked verbally by a case officer. These changes have been made to streamline the process and allay concerns of phoenixing.”
Foot Anstey Solicitors associate Alan Hughes says: “If the FSA wants to change the conditions applying to firms cancelling their permissions, the correct way to do it is by consultation on new rules and this appears to be a slightly underhand way of doing it, attempting to shortcut that process.”
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Readers' comments (8)
Anonymous | 30 Sep 2010 12:57 pm
The FSA do not need to consult, they make the rules up as they go along.
What are they going to do if firms do not have the necessary requirements in place?
If advisers want to exit the industry, and who could blame them? will the FSA prevent them from doing so if everything is not the way they prefer? How will this work under RDR if an adviser is not qualified to remain post 2012.
Perhaps they have only just realised the nightmare they have created.
Open and transparent is how they describe themselves.Devious and Underhanded is how they are perceived.
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Anonymous | 30 Sep 2010 1:56 pm
You spend 10 or 20 years building up a business which had value and did not take maximum commissions (unlike then banks of 5% or even 10%) and then when the day comes early that you want to leave the industry because you've had enough of the FSA's crap. Note I say early becuase teh combination of exams, capital adequacy and all the other weight of regulation makes it pointless to carry on, not only can you not sell what should have been worth about £200k as a going concern, but you can't leave either and have to keep paying FSA fees, PI fees (if you can get run down), but can't continue to advise, can't continue to receive your renewals to meet the FSA and other fees and so on, plus on top of that you have infinate liability because of the FOS view of the longstop!
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Phil Castle | 30 Sep 2010 2:03 pm
I can understand the concerns about looking to prevent Phoenexing, but not allowing a firm/individual to deauthorise unless provisions are put in palce for thinsg that were NOT mandatory at the time of authorisation are changing the goalposts. Advsiers cannot go back to clients and say, "sorry Mr Client" I didn't allow for the FSA changing the rules abotu allowing em to retire, here's your bill for your share of what the FSA now want me to have which they didn't before....
I suggest the FSA draw a line in January 2013 rather than try and do things like this now. Let those who want to leave, leave with grace bearing in midn many are being forced out, rather than tie them in and force them out simultaneoulsy.
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Evan Owen | 30 Sep 2010 3:09 pm
Come on Alan, you must know that the FSA is within its rights here, too many companies leave their dirty washing for others to clean, particularly sole traders who can never escape, not until their estate is dispersed.
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Anonymous | 30 Sep 2010 5:22 pm
Best thing is to keep your Passport up to date at all times, money in a foreign bank account and don't tell anyone when and where you are going!
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Adam Smith | 1 Oct 2010 8:50 am
As a CF10 who deauthorised a firm in 2007, I can testify that the questions now formally included on the form were formally asked of us then. Nothing to see here, move on...
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Simon Kershaw | 1 Oct 2010 11:12 am
Adam Smith,
Were you asked to attest the answers in writing under signature?
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Anonymous | 1 Oct 2010 11:19 am
can't live with them, not allowed to live without them!
At the end of ther own careers however, the FSA will walk away scott free, no matter what mayhem they leave in their wake.
We are All part of the big and equal society-not
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