Adviser bodies have welcomed the Financial Conduct Authority's decision to introduce a directory to replace its register but urged the watchdog to make sure it is used to prevent phoenixing.
Earlier today (4 July) the FCA unveiled its proposals for creating a new directory of individuals and firms to address the problem caused by the introduction of the senior managers regime, which was set to mean only senior managers will appear on the regulator's register.
The prospect of large numbers of people - including most financial advisers, portfolio managers and traders - no longer being visible on the register had prompted concerns about consumers being more exposed to financial scams.
Late last year the Personal Investment Management and Financial Advice Association (Pimfa) said the changes to the register as part of the senior managers regime were a "retrograde step".
Meanwhile the Chartered Institute for Securities and Investment (CISI) has said it would be "damaging" for firms and the public to be denied this single, reliable source of information.
Responding to the news of a new directory, Ian Cornwall, director of regulation at Pimfa, said: "As Pimfa have repeatedly said the register is not fit for purpose, we welcome the FCA taking action to improve the data available in respect of senior managers and other key individuals within the firm including individuals providing advisory and discretionary service to clients.
"We will carefully review the detailed proposals to ensure they address the shortcomings identified by Pimfa and others in the current register to enable firms to go about their business and clients to have the relevant comprehensible information they need.
"This, of course, includes an urgent need for firms with recognised offences to be prevented from resurrecting."
Simon Culhane, chief executive of the CISI, added: "We are very pleased to see that the FCA is proposing a new directory to help consumers and firms check the status and history of those working in financial services.
"This sensible and important development follows advice and feedback we gave to the FCA following their consultation earlier in the year. The FCA’s reinstatement of this maintained and improved register will help build trust and confidence in the financial services profession with consumers. This is a win for consumers."
When launched the directory will include information on all those who hold senior manager positions, which require FCA approval, and those whose roles require firms to certify that they are fit and proper, which do not.
It will include details of where they work, what roles they hold, what type of business they are qualified to do and whether there are any regulatory sanctions or prohibitions against them.
Since the directory would mean making public information on individuals who do not currently appear on the register, the FCA has proposed introducing a requirement on firms to report certain information on these people, including any appointed representatives.
The FCA has proposed that firms update the directory fir the first time as they certify their employees to comply with the senior manager's regime.