The FSA's decision to give interim permission to those businesses that have not received permission to trade when regulation comes into effect has been branded a “dramatic policy u-turn” by law firm Reynolds Porter Chamberlain (RPC).
RPC said the concession would also apply to businesses that have been turned down by the FSA but whose cases are being considered by the Financial Services & Markets Tribunal.
RPC partner Jonathan Davies questioned whether the concession was an admission that such an ambitious expansion of the regulator's remit was not going to plan.
He said: “Cynics will suggest the concession has been made to avoid the need for FSA staff to give up their Christmas holidays to process the backlog of late applications.” [1]
Firms with interim authorisation will be subject to the same FSA rules as firms with full authorisation but with two notable exceptions in that clients of firms that only have interim authorisation will not be protected by the Financial Services Compensation Scheme and those firms may not appear on the published FSA register of authorised firms until July 14 2005.
