FSA Annual Report 2006/07 - Better Regulation Ltd

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Section three – Improving our business capability and effectiveness
FSA Annual Report 2006/07
Core regulatory transactions
Regulatory activity
We received high volumes of
applications and notifications for
our eight core regulatory
transactions (see Table 3.2).
The most notable increases were in
corporate authorisations
applications from financial advisers,
banks and life insurance companies.
Customer satisfaction
The customer satisfaction research
we carry out on our core regulatory
transactions helps us to identify
areas for improvement. The latest
customer satisfaction figures show
an improvement in our performance;
six of the seven core regulatory
processes measured achieved
satisfaction levels above our target.
Improving customer satisfaction
with the authorisations and
cancellations processes has been
particularly challenging; for the first
time we have met our target on
authorisations and, following a
number of improvements to the
cancellations process, we expect to
meet our target in 2007/08.
Following feedback from firms we
have made the following changes to
our processes.
• Improved authorisation packs –
we have developed ‘build your
own’ application packs for
different types of firms, including
securities and investment
management firms, banks and
personal pension scheme
providers. These packs are
shorter, easier to use and should
reduce costs and administrative
burdens for firms.
• New welcome pack for newly
authorised firms – this provides
key information for new firms,
for example on regulatory
reporting requirements and fees.
Table 3.2
Core regulatory transactions
• Faster decisions on authorising
firms – feedback from firms
showed that this was a key driver
of customer satisfaction. We have
shortened the average time taken
to process an application for
authorisation from three to two
months.
Received during Received during
06/07 05/06
Corporate authorisations 2,193 1,982
Waivers 1,377 999
Variations of permission 4,215 2,044
Changes of controller 1,473 1,288
Cancellations 2,586 3,088
Passporting 1,759 5,288
Individual approvals 48,578 45,384
Collective investment schemes 1,526 1,165
The increase in the number of life insurers seeking authorisation reflects
the market entry of specialist bulk annuity insurance firms. We assessed
the risks posed by these firms, including reviewing their financial and
actuarial projections, while meeting applicants’ timetables for
authorisation.
During the year we have refused ten applications for approval. Reasons
for refusal included failure to demonstrate sufficient competence, failure to
be open and honest and failure to disclose previous disciplinary history or
Court judgments. In a further eight cases we issued a Warning Notice that
we were minded to refuse approval and the applicants withdrew.
In November 2006 we refused to approve Stanley Olutola and to authorise
his firm, P S Mortgages Ltd. Mr Olutola failed to disclose that he had
previously been subject to disciplinary action by the Association of
Chartered Certified Accountants (ACCA). The matter was referred to the
Financial Services and Markets Tribunal, which agreed with our decision.
Mr Olutola failed to demonstrate that he had the honesty and integrity
required to carry out the controlled functions applied for.
• Improved information on our
website about applications and
notifications – we have added
answers to frequently asked
questions on variations of
permissions and passporting,
introduced short forms for
certain variations of permission
and introduced email submissions
of passporting notifications.