Brokers are in the dark about FSA replacement

Just one in 20 brokers are able to name the Financial Conduct Authority as the replacement for the Financial Services Authority due to commence in 2013, a study shows.

The Sanctionssearch.com poll of 100 brokers also found that only two-thirds knew the FSA was even being replaced by the FCA next year.

Chris Clare, director of SanctionsSearch.com, believes the new regulator will focus its attention on small firms.

He says: “It seems extraordinary that brokers are so ill-equipped for the changes coming up.”

Bill Warren, managing director of Bill Warren Compliance, says he can understand why some brokers might not be aware of the change in regulator as they are trying to survive at the moment.

He says: “There has been so much change that some brokers I have spoken to are simply waiting to see what the final rules are and then get ready. The new regulators have been talked about a lot and there is confusion over where the split will come.

“I am surprised that more people don’t know more about it but I am sure they will get themselves in line when they need to.”

The poll also shows that just 14% correctly understand the implications of checking whether clients are on an HM Treasury blacklist.

Mortgage Strategy reported in March that brokers were falling foul of the regulator by failing to check their clients against the blacklist.

Under Treasury legislation, a financial firm can commit a criminal offence by transacting with or providing advice to individuals with links to terrorism.

The Treasury publishes a blacklist of such individuals on its website, against which firms are expected to check their client database to comply with the FSA’s financial crime requirements.

One head of compliance at a major network who took part in the poll wrongly believed it was exempt from the sanctions legislation.