The FSA application form can appear misleadingly simple, says Alex Peterkin
The FSA has promised a simplified application process for firms in response to having some 25,000 firms seeking authorisation anda significant number wanting to vary existing permissions. So, with the application gates open, just how easy is it going to be to gain authorisation by 2005?
The FSA has simplified the initial information collection with a concise and apparently simple 38-page electronic form. This focuses on the business in form HSF1 and on individuals in a similar slightly shorter 20 page electronic form, HSF2.
With a single HSF1 and multiple HSF2s to complete, some may be thankful for electronic submission where boxes can be ticked by the click of a mouse, and the narrative in the most part being restricted to spelling names addresses.
From the first flick through the pages, firms may be forgiven for thinking completion of these forms will effectively be routine.
Alas, things are rarely as simple as they first appear, and there are a few trick questions that firms will be best advised to give thought to before either putting pen to paper, or even placing the cursor over the chosen box.
Even the most ill-prepared firm or those with unqualified compliance advisers, should be able to guess through to page 19 of HFS1. But once they hit the regulated activities section, firms would be best advised to have worked out their answers beforehand or risk getting a compliance 'requirement' they don't expect, need or even want.
Question 43 - the ever-present 'would you like to restrict things or add to things' will catch out many unprepared firms, as in some cases additional permissions may be required.
Owners and influencers in HSF1 provide the link to exactly the number of versions of HFS2 a firm should prepare. So once again the larger the firm the more complex this part of the form will become.
Move on to the close links section and the smaller and less complicated firms will begin to feel as if they are nearly on the home straight, while others will be longing for simpler group relationships, as they struggle to collect the required returns.
Having progressed by this stage to almost three quarters of the way through HSF1, firms will now indicate what they have done in respect of compliance planning to date. The home straight deals with the practical implementation of some aspects of FSA regulation and makes no apology for using FSA jargon.
Attempts have been made to be helpful. For example, it refers to the FSA handbook for further guidance on what some of the terms and conditions mean. But, like any multiple choice test, there is always room to guess. But remember a guess could carry a high price.
The response given will help the FSA to allocate the firm one of their notional boxes. These boxes may be headed up as simply as 'likely to be wrong', 'fishy' or 'seems OK'.
I would encourage all brokers to take maximum advantage of the one-day courses that will be run by Biba across the UK in February. All Biba members will receive invitations to these events and information can also be found on the members only section of the Biba website or by contacting Biba's training department on 020 7623 9043.
alex.peterkin@brokercompliance.co.uk
