FCA taking longer to approve firms - survey

Reuters
The logo of the new Financial Conduct Authority is seen at the agency's headquarters in the Canary Wharf business district of London
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The logo of the new Financial Conduct Authority (FCA) is seen at the agency's headquarters in the Canary Wharf business district of London April 1, 2013. REUTERS/Chris Helgren

LONDON (Reuters) - Viable financial firms are failing to see the light of day in Britain due to the increasing amount of time it takes to get regulatory approval, data gathered by law firm RPC showed.

Approval times for new financial firms hit an average 25.8 weeks in the second quarter of this year, the second longest since a peak of 25.9 weeks in the same quarter of 2012.

The data series runs from the second quarter of 2008 - when approvals took 13.9 weeks just before the financial crisis gathered pace - to the second quarter of this year when the new Financial Conduct Authority took up the reins.

The FCA and the Bank of England took over supervision from the Financial Services Authority, which has been scrapped. Some firms must get approval from the FCA and the central bank.

Richard Burger, a partner at RPC, said it was a concern if the supervisory shake-up was causing at lengthening approval time.

"Such are the delays in getting approval from the regulator that many very viable financial services businesses never get off the drawing board," Burger said.

The FCA said there was a balance to be struck between speed and protecting customers.

"We are also working with trade bodies to ensure that applicants understand how they can demonstrate they meet our requirements, which will enable us to consider applications more quickly," the FCA said.

The watchdog said it published in March big changes to regulatory and authorisation requirements for new banks which will speed up the approval process.

UK lawmakers are keen to see more competition in high street banking after a string of mis-selling scandals spanning years involving the incumbents.

(Reporting by Luisa Porritt; Editing by Christina Fincher)

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