FSA authorisation now takes five months

7 June 2010 | By Natalie Thomas

RPC says that the average number of weeks it takes the FSA to decide whether to authorise a company to do financial services work jumped 71% in the last year alone, up from 11.4 weeks in Q1 2009 to 19.5 weeks Q1 2010.

Before the credit crunch began, firms only had to wait an average of 7.5 weeks - Q1 2007.

Jonathan Davies, Regulatory Partner at RPC, says: “Delays in authorising new entrants into the financial services market damage consumers by reducing competition.  They also damage Britain’s international competitiveness.

“The FSA needs to come clean on why it is taking longer and longer to authorise financial services firms.  Are they implying that they were not checking new applicants properly a year ago or are they just dragging their heels?.

“If the FSA does not have the capacity to process applications properly then it should say so.”

Davies says that after collapse of Northern Rock everyone understood that the FSA might want to exercise more due diligence but that it seems absurd that the time taken is still rising over three years later.

But he says it is clearly in the interests of consumers for new businesses to enter the financial services market.  But those businesses should not be dragged into a bureaucratic quagmire by the FSA.

He adds: “Delays prevent financial services firms from starting up, depriving the business of revenue and the public of additional services.”

RPC points out that some businesses could be waiting much longer than 19.5 weeks, because that figure is just an average.

He adds: “Some of these authorisation decisions from the FSA might be breaching the maximum six month statutory limit the FSA is under.”

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