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Firms face fee if they fail to file in full

The FSA is consulting on introducing a penalty administration charge for firms which persistently fail to submit their retail mediation activities returns properly.

In its regulatory fees and levies consultation paper, published last week, the FSA says it spends a considerable amount of resources dealing with firms which repeatedly fail to fill in the RMARs adequately.

It says this means that firms which fill in the forms properly are, in effect, subsidising the minority which fail to do so.

It says over the coming months it will implement a number of initiatives to educate and encourage poor reporting firms to improve the quality of their submissions.

But it says that if these initiatives do not work it will propose to consult on raising the administrative charge on firms with sub-standard RMARs. It says a similar approach has been successful in improving submissions arriving on time. Firms are fined 250 for late submissions.

The paper says: “We intend that any administrative charge would recover the average costs of dealing with the persistent poor reporting of the RMAR and it would not represent a financial penalty under our enforcement procedures. Enforcement action would therefore still be available.”

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