The FSA has spectacularly failed to meet its own service standards for dealing with applications for authorisation after revealing it was unable to deal with over three-quarters of cases within its three-month limit.
The regulator has internal service standards requiring it to process a complete corporate authorisation within three months in 75 per cent of cases but between October 2009 and March 2010, it completed less than 25 per cent of 501 cases within the limit.
The FSA also failed to meet its statutory target of processing 100 per cent of applications within six or 12 months, with 98.9 per cent of cases processed within the deadline.
Foot Anstey Solicitors associate Alan Hughes, whose firm has been representing former Park Row advisers, says the FSA has been slow in processing applications for many small IFA firms, not only ex-Park Row advisers. He says: “I get the impression that since the credit crunch, the FSA has decided to tighten up and look at applications more carefully but it appears completely unable to discriminate between high-risk and low-risk applications. It is applying a blanket approach to all applications which is completely unjustified.”
Aifa director Robert Sinclair says: “With the FSA’s new focus on having a stronger gatekeeper role, firm authorisations are taking considerably longer, with more documentation needed and senior individuals being interviewed by the FSA more rigorously.
“We welcome the fact there is more rigour around making sure that only good firms come to market but we would not want the regulator to be stopping individuals from trading where they are just moving from one regulated entity to another.”
Data obtained from a Freedom of Information request by law firm Reynolds Porter Chamberlain reveals that between the second quarter of 2007 and the second quarter of 2010 the average waiting time for FSA authorisation nearly trebled from 7.9 weeks to 21.1 weeks.