The Financial Conduct Authority has reported a decline in the number of appointed representative-related applications for 'approved person' being processed on time.
The data, published last week (May 19), revealed that in the final quarter of the year only 82.8 per cent of cases were processed within the three month deadline.
This is a decline from 94.7 per cent in the preceding quarter.
The FCA's targets above 98 per cent are deemed green, between 98 per cent and 90 per cent are amber and below 90 per cent are red.
The regulator said the fall in the final quarter was due to a large number of applications being submitted before the applicant had the necessary permissions so the applications could not be determined.
“The applicant subsequently withdrew the application for permissions and the associated approved person applications after the deadline,” it said.
“Without those applications the performance would have been c.95 per cent (amber).”
The regulator said the increasing complexity of some cases means that it will not always meet statutory targets.
“In these cases, it is right that we take the time to make sure there is greater scrutiny and engagement with the firms involved,” the FCA said.
“We also continue to see too many incomplete and poor quality applications.”
However the FCA improved the proportion of cases being processed in time for applications for change of control, applications for approved persons which were SMCR related, applications for new firm authorisations and applications for variation of permission.
For variation of permission, 99.7 per cent of applications are being processed within timescale.
In 2021 and 2022 applicants for authorisation and registration were experiencing delays.
Since then, FCA performance has improved following investment, hiring 159 extra staff in the past two years, and through better use of technology and data to automate parts of the process.
“The data for the final quarter of 2022-23 shows we continue to make progress towards meeting our service level targets,” the FCA said.
“The metrics, necessarily, involve a time lag so do not reflect current performance and we expect to see further improvements.”
The FCA said it is increasing scrutiny of applications at the authorisation gateway.
The number of new firm applicants that were not authorised in 2021-22 was one in five, up from one in 14 in the previous financial year and this has continued through 2022-23.
To improve the quality of applications, the FCA has also issued more detailed guidance for cryptoasset businesses and mortgage intermediaries.
The City watchdog will continue to enhance the guidance to firms in other areas.
“We are also testing a new digitised form for approved persons applications with a sample of firms,” it said.
Changes to reporting
The regulator said it wants to make sure the UK is the best place in the world for financial services to thrive.
“This involves providing an effective and efficient service whilst maintaining high standards to protect customers and to bolster the reputation of the UK market,” it said.
“In the interests of transparency and so we can be held to account on our performance, we are now publishing data on our authorisations service metrics quarterly.”
The FCA said it wants firms to be able to better predict how long it will take for their application to be determined.
Previously, it only reported on the proportion of cases determined within statutory deadlines.
“This gave limited insight as to how quickly most cases were determined,” it said.
“To increase transparency, we are now publishing the lower quartile, median, and upper quartile of the range of calendar days taken for determination in each category of application.
“This shows that most applications are determined significantly ahead of the statutory deadline.
“Complete and comprehensive applications are likely to be determined in good time.”
The FCA said it is stopping reporting voluntary metrics for approved persons, appointed representatives, and mutual registrations due to the additional checks at the gateway.
The regulator will publish its performance for the first quarter of 2023-24 in August 2023.
sonia.rach@ft.com
What do you think about the issues raised by this story? Email us on ftadviser.newsdesk@ft.com to let us know
