In today’s Financial Times, it was claimed that delays in new firm authorisations ‘could become a drag on London’s international position’. According to the article (‘FSA delays for new businesses spark City fears’, Financial Times, 11 October 2010), financial services firms must now wait three months to become approved whereas in 2007 the registration time was seven weeks, or just under two months.
Jerome Lussan, CEO of Laven Partners comments: “It is true that the FSA is taking longer than previously to approve new firms – in 2007 one of our clients was approved within just three weeks. However we believe that the extended approval period is the result of improved processes and controls at the FSA and for our clients the success rate and timing has been excellent. During the financial crisis we saw regulators being asked to review the implementation of their supervisory duties – at least the FSA has learnt from the crisis and is now applying sound due diligence on anyone wishing to carry out regulated activities.”
Lussan continues: “People should also remember that by law the FSA has six months to approve a complete application – in effect they are therefore very fast and very commercial. We believe that an application that is well prepared and which anticipates any questions the FSA may raise, speeds up the authorisation process, and at present our clients are still being approved in less than three months.”
The article also said that the ‘added regulator burden — is one of a growing number of factors leading many to consider starting up new businesses abroad or redomiciling to locations such as Geneva or the Channel Islands’.
Lussan says: “There as been a lot of hype, in particular in the media, about businesses leaving London but we believe that the majority still want to stay in London as they know that being in a regulated environment is attractive to clients. Our view is that the FSA’s controls are good news for London and its position within the international financial services community. We find that other EU regulators of the same ilk have not reacted as positively to the crisis. During the financial crisis regulators were criticised for not supervising institutions appropriately and now that the regulator has taken appropriate steps to improve its supervision, it is being reproached again. In reality many other jurisdictions, including the very popular Luxembourg, take just as along to approve a new firm. We believe that the FSA’s new processes mean a better regulated environment, only enhancing London’s position.”
