The FSA is taking nearly three times longer to approve new authorisations than it did before the credit crunch, according to figures obtained under the Freedom of Information act.
The figures, obtained by law firm Reynolds Porter Chamberlain, show that the FSA took an average of 7.9 weeks to grant authorisation in the second quarter of 2007 but this jumped to 21.1 weeks in the second quarter of this year, which was a rise from 19.5 weeks in the first quarter of 2010.
Applications for corporate authorisation fell from 2,193 for the financial year 2006/07 to 1,520 in 2009/10.
RPC regulatory partner Jonathan Davies says: “Fewer financial service businesses have been trying to enter the market since the credit crunch started so it is even more astonishing that FSA authorisations are taking so long. These delays risk reducing competition and harming the City’s international competitiveness.”
Davies argues that the longer authorisation process either stems from a more rigorous supervisory approach from the regulator or is down to the FSA lacking the appropriate resources and staff to cope with the workload.
He says it is still unclear how the authorisation process will work after the FSA is abolished. He adds: “Financial services firms will be concerned that it may become even more complicated to get authorisation or that it might take even longer.”
Philip J Milton Financial Services managing director Philip Milton says: “There has been a lot of pressure on the regulator of late. I would guess that a lot more people at the FSA are being excruciatingly bureaucratic to make sure that before anybody is authorised and has all the boxes ticked that the FSA is satisfied with that authorisation going ahead”
An FSA spokeswoman says: “We have increased the intensity with which we scrutinise authorisations and have publicised our approach extensively to firms and the advisory community.”
She says authorisation timescales are also driven by factors such as complexity of the business, number of individuals needing approval and how accurately the application is completed.