FSA Annual Report 2006/07 - Better Regulation Ltd

Section three – Improving our business capability and effectiveness
FSA Annual Report 2006/07
39
Table 3.1
Type of firm
Banks
Building societies
Securities and futures firms (subject to the CRD)
Average change in volume of data reported
Securities and futures firms (not subject to the CRD)
Investment management firms (subject to the CRD)
Investment management firms (not subject to the CRD)
45% reduction
25% reduction
55% reduction
77% reduction
410% increase
28% increase
Note: The above figures are drawn from the full impact analysis published as an addendum to
PS07/1 Integrated regulatory reporting (IRR): Certain investment firms. They represent changes
in volume of data at an individual firm level and are based on an average between the two
methods used in the full analysis.
For banks, building societies and securities firms the reporting requirements
have reduced compared with those required under the previous regulatory
regimes, even taking into account the impact of the CRD. For investment
management firms, the increase in reporting by both CRD and non-CRD
firms reflects the under-reporting required of these firms in their previous
regulatory regimes.
The proportion of our future reporting requirements directly attributable to
the need to monitor compliance with the CRD is significant; over 30% for
credit institutions and 80% for investment firms. The risk-based approach
to setting capital requirements under the CRD gives firms greater flexibility,
but is more sophisticated and so requires additional monitoring and
reporting requirements depending on the complexity of an individual firm’s
business. We have taken a proportionate approach to the reporting
requirements and collect significantly less data than our EU counterparts.
IRR is already in place for a large number of firms (mainly mortgage and
general insurance intermediaries and retail investment advisers) through
submitting the Retail Mediation Activities Return (RMAR), the Mortgage
Lending and Administration Return (MLAR) and the Complaints return.
Firms have continued to become more familiar with these returns and this
has been reflected in the number of returns submitted on time, which has
improved from 76% in 2005/06 to 82% in 2006/07. In 2006/07 we
cancelled the permissions of 98 firms who failed to submit returns and
charged around 3,000 firms an administrative fee for submitting late
returns. In April 2007 we cancelled the permissions of two firms who had
repeatedly failed to submit their RMARs on time.
During the year we completed the first phase of our review of the
effectiveness of the RMAR, which is submitted by over 90% of the firms
we regulate. The average number of queries on the RMAR to our Firm
Contact Centre is half the figure for the previous year. Feedback from firms
shows that most concerns were about the capital section of the RMAR. We
have carried out targeted market research to gain a more detailed
understanding of the issues, and we will use the results of this to further
improve training and guidance for firms.
FSA Register
During the year we have made a
number of improvements to the FSA
Register, which is available on our
website and contains information on
regulated firms and individuals. We
have received positive feedback on
these improvements from users.
We have:
• improved the response times of
the Register during busy periods
(the number of times users have
not been able to view the
Register has reduced from
15,700 for the four months
December 2005 to March 2006
to 53 across the same period to
the end of March 2007);
• enhanced the facilities for
searching for firms, individuals
and collective investment
schemes;
• added additional historical
information and information on
appointed representative firms;
• introduced a ‘Register News’
section to keep users informed of
service availability and Register
developments; and
• enabled users to print a copy of
individual Register pages.
Mutuals registration system
In addition to our responsibilities
under FSMA we also register and
record documents on behalf of
mutual societies, and in May 2006
we introduced a new mutuals
registration system. We developed
the system following discussions
with the industry and were assisted
by Co-ops UK, a mutuals sector
sponsoring body. Our new system
improves the processing of
applications for registering and
submitting annual returns and is the
first electronic register of mutual
societies to be made available to the
public.