On 23 June, Laven Partners attended the FSA Annual Public Meeting. At the meeting, the FSA outlined its timeline and goals for the immediate future, highlighting both the strengths and weaknesses of the regulatory agency as well as its impending restructuring.
FSA Authorisations
Jerome de Lavenere Lussan, CEO of Laven Partners, inquired during the meeting about the slowness of the current FSA authorisation process, citing criticisms from newspapers and some London-based investment firms that reported the tardiness of the system has been detrimental to London as a business center.
The FSA acknowledged this claim. Lesley Titcomb, Acting Chief Operating Officer of the FSA, asserted that the tardiness is
“due to the financial crisis, a more intrusive approach to regulation, and the fact that the burden of proof for proper authorization lies with the applicant.”
The FSA also argued that the current authorisation process, while slow, is a necessary measure to ensure the security of the financial services sector in London. Titcomb emphasised that the FSA looks at a multitude of applications, all of which pose a degree of risk to consumer protection, financial stability, and market confidence. She asserted that it is the duty of the FSA as a regulatory agency to protect its jurisdiction from potential hazards.
As per the Financial Services and Markets Act 2000, the FSA has 6 months to make a decision in relation to a complete application and 12 months in relation to an incomplete application. However according to the service standards facts on the FSA website, the FSA still aims to make a decision on complete applications within three months and in 99.3% of the cases this target has been met.
Lussan comments: “The FSA has certainly become more intrusive when reviewing applications and this has had a knock on effect on the processing speed. In 2007, our clients’ applications were approved as quickly as in 3 weeks. However we find that some of the rumours going around in the industry that applications take 6-9 months are highly questionable if not foolhardy. Most our investment manager clients are still approved in just over 2 months. The trick is to anticipate the questions the FSA raises and provide as complete an application as possible.”
