The warning follows figures from the FSA’s Threshold Conditions Team (TCT) showed that over the past year more than 100 smaller financial firms had been ordered to make remedial changes to the way they operated in order to address serious failings and 19 firms had lost their authorisation to carry out business.
In the year to 30 June 2004 there was a number of recurring threshold conditions breaches by firms including lack of professional indemnity insurance (PII); financial resources, where the FSA cancelled firms’ permissions where they have been in financial deficit for sustained periods; failure to comply with Ombudsman awards; plus non co-operation with the FSA and non-payment of FSA fees.
Chris Cummings, director of the Association of Mortgage Intermediaries (AMI), said: “At this stage in the game brokers need to have a good understanding of the threshold requirements. The FSA has proven it has teeth and will lay down penalties if intermediaries don’t comply. AMI’s biggest challenge in the next year is to make sure brokers have come to grips with these rules.”
Clive Briault, managing director, retail markets business unit at the TCT, said: “The action taken over the last 12 months should send a message to all small businesses regulated by the FSA that we will not allow firms which fall significantly below the minimum standards to remain authorised.”
