Trade bodies&#39 fears on FSA&#39s reporting rules

Trade bodies fear that new reporting procedures proposed by the FSA will add costs and mean an upheaval in business practices.

CP198, published last week, outlines regulatory reporting proposals for financial services firms. In it, the FSA proposes a “streamlined approach to reporting requirements” which would mean that all intermediaries must file reports to the FSA electronically. The regulator says the proposals are not targeted specifically at IFAs but trade bodies such as the LIA say that, due to their relative size, IFA firms may struggle to come in line with the new reporting structure.

LIA head of public affairs John Ellis thinks the FSA may find a problem with smaller firms because many of them are not up to speed with information technology.

The first implementation date is proposed for 2005 for firms coming under the new general insurance and mortgage regulation and for retail investment firms, which would include IFAs.

Aifa director general Paul Smee says: “We will be looking hard at the cost-benefit side. Because people will be reporting online, regulatory costs ought to be reducing.”

FSA chief operating officer Paul Boyle says: “We are proposing to move to an integrated, harmonised framework to replace all other reporting forms and exploit electronic reporting.”