Networks that use scare tactics to recruit new members may be refused authorisation, according to the FSA.

The FSA is understood to be "furious" with the behaviour of some networks, which have been using marketing tactics designed to scare brokers into becoming appointed representatives (AR) rather than seeking direct authorisation.

A spokeswoman for the FSA said that the regulator was aware of a "small minority" of networks that were using these tactics.

"Where we come across firms that have been scaremongering, or in any way misleading the market as part of their AR recruitment campaign, we will take this fact into account in considering their application."

The spokeswoman added: "Well run firms have nothing to fear from authorisation. And we have streamlined the authorisation process to make it as straightforward as possible for firms to apply."