There is good news coming out of the FSA at the moment. The regulator is pleasantly surprised by the quality of the applications coming in from brokers (see news pages). This is clearly a heartening message for those who have been putting so much work into becoming compliant, and it confirms the professionalism of the broker market.

Furthermore, the FSA is expecting to begin sending out 'minded to authorise' letters possibly as early as the end of April. This would be a major boost to brokers and will relieve the anxieties of many who are nervously waiting to see if they will have a business from January 2005.

But the FSA has also issued warnings to future applicants - the most important being not to try to fool the regulator.

The FSA says it has been busy collecting background information on brokers, and that this will be used to check the information given on brokers' application forms.

One can only speculate at the level of background detail that the FSA has on each firm. A small regional broker may feel that it is too anonymous to appear in the regulator's files and as such may be tempted to fudge its application. But is this a risk that is worth taking? Even if the deceit is only a small one, the very fact that the broker has tried to deceive the FSA will be viewed very seriously.

Another message from the FSA is that first impressions count. A firm that has completed the form conscientiously, demonstrating due respect for regulation and its values, will be received better than those that do not. An obvious point perhaps, yet nonetheless important. Simple things can make all the difference.

Michael Faulkner