The Financial Service Authority has started issuing letters to firms indicating that it is minded to authorise them to carry on mortgage or general insurance business. The first MTA dispatch consisted of more than 1,000 letters.
The firms receiving MTA letters will be set to receive formal authorisation later this year unless the FSA reconsiders following significant change in their circumstances or new information emerging in the interim.
Formal authorisation notification will be sent to firms nearer to the relevant date for the start of regulation – Mortgage Day on October 31 2004 and GI Day January 14 2005. The FSA sats it expects this to be no earlier than August 2004 for firms doing mortgage business and November 2004 for firms doing insurance business.
In the meantime firms can use their MTA letter if they wish to demonstrate to customers and firms they do business with that the FSA is minded to authorise them when regulation takes effect.
Sarah Wilson, director of the high street firms division, says: “This first dispatch of MTA letters marks important progress in the major exercise of bringing an unprecedented number of new firms into regulation at one time.
“From now on, letters will be sent out regularly in the normal course of our authorisation work.
“In the course of the FSA's checking of application forms it has picked up some common recurring errors firms are making on application forms and have published new guidance on that this week on its website to help firms avoid these.”
Each MTA letter sets out the scope of permission the FSA is minded to grant to the particular firm, including any requirements and/or limitations and sets out the list of individuals whom we are minded to approve to carry on controlled functions on behalf of the firm.
In the case of applications by Principals the MTA letter also lists the appointed representatives and the individuals whom the FSA is minded to approve to carry on controlled functions on behalf of the appointed representatives.
The FSA has now received around 15,000 registrations to receive an application pack and more than 5,000 applications – the majority so far relating to mortgage business. Today marks the last day by which the FSA can guarantee to turn round mortgage applications in the six months before Mortgage Day, so any firm contemplating seeking authorisation in the mortgage area who has not yet forwarded their application should do so as speedily as possible from now on and we will do our best to turn it round in time but without guarantee.
During next week the FSA will publish new statistics as of end-April on registration and application progress thus far. With regard to insurance business May 31 is the latest date for applications to be made at a discounted rate and July 13 is the latest date for guaranteed turnaround by us in advance of GI Day January 14 2005.