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Authorisation, supervision, enforcement powers laid down

The FSA has laid out its full framework of powers and responsibilities in Consultation Paper 146, detailing the process of how firms can register and, where appropriate, be punished.

The FSA has already set out its plans for the authorisation process in the Authorisation Manual, which forms part of the FSA Handbook, and firms will need to apply for authorisation ahead of the start of the mortgage regulatory regime in mid-2004.

The regulator says it will give due credit in the application process to “firms of good standing” registered with voluntary organisations such as the MCCB. Among the factors taken into consideration by the FSA will be:

  • how its rules compare with the FSA&#39s
  • the extent to which the organisation monitors compliance with its rules
  • the action it takes when breaches occur.

The FSA will then go on to consider the individual firm&#39s record and its ability to provide relevant information to the regulator during the application process.

Once within the regulatory framework, adopting powers from the Financial Services and Markets Act 2000, the FSA will be able to:

  • withdraw a firm&#39s authorisation
  • discipline firms and people approved by us, through public statements and financial penalties
  • seek injunctions
  • prosecute various offences
  • require the return of money to compensate consumers

CP146 also explains the proposed fee-paying system with periodic fees – payable annually to cover FSA operating costs, and application fees payable by firms seeking authorisation. The FSA has yet to provide an estimate for these fees, and plans to consult further in this area in December.

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