The FSA says it has identified a number of common mistakes firms are making when filling out their application form for direct authorisation.
The regulator says the mistakes are causing delays in its processing of applications and it will be posting some practical tips on its website this week to help firms avoid these mistakes in future.
The FSA says although it seems obvious, firms should read the forms carefully before they begin completing them, including the instructions and guidance. It says brokers should look up cross-references and most importantly, should not try to complete the application in a hurry. It says most mistakes can be easily avoided if advisers take their time and read through the answers before submitting the application.
Questions on the application where firms seem to slipping up include section H - Compliance with our regulatory requirements, question 53. Firms that do mortgage and general insurance business but only hold client money for their mortgage business should cross 'f'. On the supplementary information sheet they should advise the FSA they do general insurance business but do not hold client money for this part of their business.
For question 54, of the firms that have told the FSA they will not be holding client money, most of them will need a requirement to reflect this. The requirement prevents firms from holding client money and is consistent with the declaration that they do not hold client money. It is recorded on the public Register so that consumers can check whether firms are permitted to hold their money before they hand money over to them. Having the requirement on a firm's permission will also reduce the need for the FSA to ensure that firms have systems and controls in place to comply with our client money rules.
In Section I - Application fees, mistakes are occurring because firms do not notice the 願' outside the boxes. The result is they inflate their income by thousands of pounds. If the income is £500,000, firms should complete the box with 驌'. If the firm inserts 500,000, the fee will be calculated on an income of £500m.