FSA Annual Report 2006/07 - Better Regulation Ltd
FSA Annual Report 2006/07 - Better Regulation Ltd
FSA Annual Report 2006/07 - Better Regulation Ltd
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Section three – Improving our business capability and effectiveness<br />
<strong>FSA</strong> <strong>Annual</strong> <strong>Report</strong> <strong>2006</strong>/<strong>07</strong><br />
39<br />
Table 3.1<br />
Type of firm<br />
Banks<br />
Building societies<br />
Securities and futures firms (subject to the CRD)<br />
Average change in volume of data reported<br />
Securities and futures firms (not subject to the CRD)<br />
Investment management firms (subject to the CRD)<br />
Investment management firms (not subject to the CRD)<br />
45% reduction<br />
25% reduction<br />
55% reduction<br />
77% reduction<br />
410% increase<br />
28% increase<br />
Note: The above figures are drawn from the full impact analysis published as an addendum to<br />
PS<strong>07</strong>/1 Integrated regulatory reporting (IRR): Certain investment firms. They represent changes<br />
in volume of data at an individual firm level and are based on an average between the two<br />
methods used in the full analysis.<br />
For banks, building societies and securities firms the reporting requirements<br />
have reduced compared with those required under the previous regulatory<br />
regimes, even taking into account the impact of the CRD. For investment<br />
management firms, the increase in reporting by both CRD and non-CRD<br />
firms reflects the under-reporting required of these firms in their previous<br />
regulatory regimes.<br />
The proportion of our future reporting requirements directly attributable to<br />
the need to monitor compliance with the CRD is significant; over 30% for<br />
credit institutions and 80% for investment firms. The risk-based approach<br />
to setting capital requirements under the CRD gives firms greater flexibility,<br />
but is more sophisticated and so requires additional monitoring and<br />
reporting requirements depending on the complexity of an individual firm’s<br />
business. We have taken a proportionate approach to the reporting<br />
requirements and collect significantly less data than our EU counterparts.<br />
IRR is already in place for a large number of firms (mainly mortgage and<br />
general insurance intermediaries and retail investment advisers) through<br />
submitting the Retail Mediation Activities Return (RMAR), the Mortgage<br />
Lending and Administration Return (MLAR) and the Complaints return.<br />
Firms have continued to become more familiar with these returns and this<br />
has been reflected in the number of returns submitted on time, which has<br />
improved from 76% in 2005/06 to 82% in <strong>2006</strong>/<strong>07</strong>. In <strong>2006</strong>/<strong>07</strong> we<br />
cancelled the permissions of 98 firms who failed to submit returns and<br />
charged around 3,000 firms an administrative fee for submitting late<br />
returns. In April 20<strong>07</strong> we cancelled the permissions of two firms who had<br />
repeatedly failed to submit their RMARs on time.<br />
During the year we completed the first phase of our review of the<br />
effectiveness of the RMAR, which is submitted by over 90% of the firms<br />
we regulate. The average number of queries on the RMAR to our Firm<br />
Contact Centre is half the figure for the previous year. Feedback from firms<br />
shows that most concerns were about the capital section of the RMAR. We<br />
have carried out targeted market research to gain a more detailed<br />
understanding of the issues, and we will use the results of this to further<br />
improve training and guidance for firms.<br />
<strong>FSA</strong> Register<br />
During the year we have made a<br />
number of improvements to the <strong>FSA</strong><br />
Register, which is available on our<br />
website and contains information on<br />
regulated firms and individuals. We<br />
have received positive feedback on<br />
these improvements from users.<br />
We have:<br />
• improved the response times of<br />
the Register during busy periods<br />
(the number of times users have<br />
not been able to view the<br />
Register has reduced from<br />
15,700 for the four months<br />
December 2005 to March <strong>2006</strong><br />
to 53 across the same period to<br />
the end of March 20<strong>07</strong>);<br />
• enhanced the facilities for<br />
searching for firms, individuals<br />
and collective investment<br />
schemes;<br />
• added additional historical<br />
information and information on<br />
appointed representative firms;<br />
• introduced a ‘Register News’<br />
section to keep users informed of<br />
service availability and Register<br />
developments; and<br />
• enabled users to print a copy of<br />
individual Register pages.<br />
Mutuals registration system<br />
In addition to our responsibilities<br />
under FSMA we also register and<br />
record documents on behalf of<br />
mutual societies, and in May <strong>2006</strong><br />
we introduced a new mutuals<br />
registration system. We developed<br />
the system following discussions<br />
with the industry and were assisted<br />
by Co-ops UK, a mutuals sector<br />
sponsoring body. Our new system<br />
improves the processing of<br />
applications for registering and<br />
submitting annual returns and is the<br />
first electronic register of mutual<br />
societies to be made available to the<br />
public.