Rise in waiting time for FSA authorisation

The length of time financial services firms are waiting for FSA authorisation continues to climb, according to new figures.

The statistics, obtained by City law firm Reynolds Porter Chamberlain LLP (RPC) in response to a Freedom of Information request by the regulator, show that in the first quarter of this year it took an average of nineteen and a half weeks for the FSA to decide whether to authorize a company to do financial services work.

This figure represented a 71% jump compared to that of 11.4 weeks for the first three months of 2009. Three years ago, firms only had to wait an average of seven and a half weeks.

Jonathan Davies, regulatory partner at RPC, commented: “Delays in authorising new entrants into the financial services market damage consumers by reducing competition. They also damage Britain’s international competitiveness.”

“The FSA needs to come clean on why it is taking longer and longer to authorise financial services firms. Are they implying that they were not checking new applicants properly a year ago or are they just dragging their heels?”

“If the FSA does not have the capacity to process applications properly then it should say so.”

He added that many businesses could be waiting much longer than the 19.5 week average.

“Some of these authorisation decisions from the FSA might be breaching the maximum six month statutory limit the FSA is under.”

“It is clearly in the interests of consumers for new businesses to enter the financial services market. But those businesses should not be dragged into a bureaucratic quagmire by the FSA.”

“Delays prevent financial services firms from starting up, depriving the business of revenue and the public of additional services.”