The Financial Services Authority (FSA) is taking three times longer to approve new authorisations than it did before the credit crisis, according to figures obtained under the Freedom of Information act.
The figures, obtained by law firm Reynolds Porter Chamberlain, show it took an average of 7.9 weeks to gain authorisation in Q2 2007 but this jumped to 21.1 weeks in Q2 2010. The waiting time increased 8% between Q1 2010 to Q2 2010, from 19.5 weeks to 21.1 weeks (see full table below).
Applications for corporate authorisation dropped from 2,193 for the financial year 2006/07 to 1,520 in 2009/2010. (article continues below)
Jonathan Davies, RPC regulatory partner, says: “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.”
“These delays risk reducing competition and harming the City’s international competitiveness. Is the legacy of the credit crunch really going to be that consumers suffer because of a lack of competition between financial service providers?”
Davies says it is still unclear how the authorisation process will work after the FSA is abolished. “Financial services firms will be concerned that it may become even more complicated to get authorisation – or that it might take even longer,” he says.