Firms waiting record six months for approval
Reynolds Porter Chamberlain LLP claims the length of time firms are having to wait for Financial Services Authority approval is 9% longer than the previous record peak of 21.1 weeks back in Q2 2010.
RPC said approval times are taking longer because the FSA is scrutinising a much higher proportion of start-ups’ business plans than ever before.
Approval times are also stalling because of the internal “twin peaks” shake-up of the FSA, the firm suggested, which has seen the organisation internally divided along the same lines that will operate when the FSA is formally broken up next year.
And the legal firm warned the FSA risks stifling competition as a result.
Richard Burger, regulatory partner at RPC, said: “The FSA is undergoing a major overhaul and it looks like the reorganisation is having an effect on the regulator’s ability to process approval applications. The current wait times could be putting a real brake on UK innovation.
“The concern is that this will worsen once the two new regulators are in place, as systemically important financial services businesses will need approval from both of them.
“This overlapping period is an opportunity for them to overhaul the process of approval, rather than simply follow the mould of its predecessor.”