A question about the FSA's requirement for firms to have a non-executive director

Question: "We are a £2m brokerage. Reading the application for the FSA they imply that we should have a non-executive director (NED) on our Board. Are they expecting to see a non-exec appointed when we apply or by Jan 2005?"

Answer: The FSA says: "We consider that NEDs, with appropriate experience, will help to provide the necessary skills and balance on the board to achieve appropriate governance arrangements. This is, in fact, guidance (SYSC 2.1.2G), so not a requirement as such. But firms which don't have a NED will need to demonstrate that appropriate governance is achieved in other ways. All rules and guidance relate to the time at which regulation comes into force. In the application forms, firms are in effect signing off on the arrangements that they will have in place once regulation comes into force."