Brokers fail to cope with electronic returns

Brokers are still failing to cope with the demands of the FSA's retail mediation activities return (RMAR), compliance experts warned this week.

It follows the news that 151 firms have had their FSA permissions cancelled by the regulator in 2006/2007. Of those 151, the FSA said 98 had directly contravened its rules by failing to submit RMAR forms.

"While our main emphasis is on helping firms to correct problems where possible, we take appropriate action when firms fail to comply with the conditions," said Stephen Bland, director of small firms for the FSA.

The RMAR, the regulator's electronic reporting system, has been met with some confusion by brokers. "Some brokers still don't understand how to fill in the RMAR," said Gary Dixon, managing director of compliance.co.uk.

"These 98 are the most extreme cases. They are companies which just point blank refuse to fill the returns in.

"But further inaccuracies are still rife. There must be hundreds if not thousands of firms out there which are still making mistakes."

Steve White, head of training and compliance for Biba, said the trade association frequently received calls for help from brokers "who are still struggling with the RMAR".

But he said that the regulator was reviewing the system in light of the Davidson Review which had recommended the FSA cut red tape.

The FSA has attempted to address concerns by offering further training to brokers. "Ensuring that firms implement and maintain these conditions is a priority for us," Bland said.