The Financial Services Authority has revealed that the number of brokers applying for direct authorisation shot up to 4,229 by the end of the discount deadline on March 31.
As expected many brokers left it to the last minute but the onslaught was accompanied by technical problems. A glitch in the online application software for DA meant that some brokers had to falsely claim they had already been regulated by the FSA.
The error came on form HSF2 where brokers are asked: 'Is the individual currently approved to perform controlled functions 21 to 27 only?' The answer for most pure mortgage brokers is no. But when some ticked 'no' the program would not allow them to submit their applications, stating an error had been made. When broker Simon Chalk, director of Mortgage Portfolio Services, rang to inform the FSA of the problem he was told to answer yes to the question despite not having being approved before.
Chalk says: “With the FSA's permission over the phone I lied to complete the form.”
The regulator has admitted the glitch but says it only affected a handful of brokers.
Sole broker Roy New also had problems getting his application emailed to him to complete. Unable to access his NTL account, he asked the FSA to email it to his back-up Hotmail address. However, he was told that as he had not registered this alternate address originally it could not be sent.
He says: “They're nice people – I'm not having a go at them but not to be able to cross out an address and replace it is bureaucracy gone mad.”
Kate Bristowe, spokeswoman for the FSA, says: “The large number registering in the last week shows there is nothing like a deadline to focus the mind.”