...and brokers will not have to be compliant when they apply for authorisation
The FSA has agreed to extend its consultation process to include software providers. As reported in Insurance Times on 15 May, software providers had called on the FSA to establish a forum similar to the one operated by the GISC, so that they would be in a better position to help brokers with regulation.
FSA high street firms division head of policy Eleanor Linton said: "It has been put in hand and we will take it forward."
Speaking at Biba, Linton also gave the strongest sign yet that the FSA was willing to compromise on the proposal that commercial customers with turnover of £1m or less be treated as personal customers.
Linton said that this issue was the key concern expressed by brokers in their responses to CP160. It had been met with a "widespread lack of industry support", Linton said. The FSA received 260 responses to CP160.
She said that the FSA was giving the option of dividing business in terms of commercial or non-commercial "serious consideration".
Linton said that, as a result, there would be three more months of consultation on the draft rules, which are due to be published at the end of June.
Linton also told brokers that they would not need to be compliant when they applied for FSA authorisation.
She said that upon application, brokers would undertake to be compliant by 14 January 2005.
In response to CP180 on fees for FSA application, Linton said the FSA would consider further fee bandings.
It has proposed that brokers with annual income of up to £1m would pay £1,200 for a standard application, whereas brokers with annual income between £1m and £25m would be hit with an £11,000 bill.
Linton said that all of the FSA's final rules for brokers, along with accompanying guidance, will be out in October, with conduct of business rules to follow at the end of the year.
She added that as a result of the 110 responses it had received to CP159 on appointed agents, the FSA would widen its ten proposed product categories and was now considering 27 categories.
Linton said that the proposed categories "didn't work" and needed to be extended "considerably".
The final rules on appointed agents will be out in the summer.
