FSA keeps business waiting for approval

BUSINESSES looking to receive authorisation from the Financial Services Authority (FSA) are now waiting longer for approval, finds new research.

Financial services firms looking to receive authorisation from the FSA had to wait up to 21.1 weeks during the second quarter to get the regulatory nod.

This marks an eight per cent rise on the previous quarter when firms were waiting 19.5 weeks.

City law firm Reynolds Porter Chamberlain (RPC), which conducted the research, said authorisations took an average of 7.9 weeks in 2007 just before the credit crunch hit.

RPC said the wait could be linked to a more rigorous approach taken by the regulator when processing applications but also suggested that the wait could be linked to the loss of top staff.

Jonathan Davies, regulatory partner at RPC said: “If it is that they are being more rigorous, what does that say about the FSA’s approach to authorisation just a year ago?”

Meanwhile, the number of businesses seeking FSA authorisation has fallen by 37 per cent over a two-year period ending in 2009.

Between 2006-07 – the height of the boom – the FSA received 2,193 applications from businesses, that number dropped to 1,375 between 1 April 2008 and 31 March 2009.

“Fewer financial service businesses have been trying to enter the market since the credit crunch started so it is even more astonishing that FSA authorisations are taking so long,” said Davies.

It remains unclear how the authorisation process will work once the FSA’s role is divided between the Bank of England and the Consumer Protection Agency, said the law firm.