About a third of Finance and Leasing Association (FLA) members said they were well prepared for Financial Conduct Authority (FCA) regulation at an FLA conference held on the topic at the British Library.
The remaining two thirds of attendees said they felt they were part way through their preparations, but that more work was required.
The event was the third in a series from the FLA over 18 months tracking the development of FCA regulation. The most recent conference was attended by approximately 250 FLA members as well as FCA representatives, and attempted to give a ‘six month report’ of life under FCA regulation.
According to director-general of the FLA, Stephen Sklaroff, a substantial majority of attendees also said they were either looking for more information on the authorisation process from the FCA, or where they had the information, were looking for more detail.
When asked what information they would like to see more of, over half responded they would like to see more information about their responsibilities as lenders for the regulatory behaviour of intermediaries, such as brokers and dealers.
Half of the approximate 250 FLA members said the biggest challenge was understanding what the FCA expects, and a quarter said it was keeping track of the authorisation of the intermediaries they work through.
According to Sklaroff, this is something that has been raised by the FLA before. He said; "What the new rules say is that you have to make sure you are doing business through a legitimately authorised intermediary, and that means you need information on if they’ve been authorised or not. So we said to the FCA that we think we need regular updates on that so lenders can be secure in knowing the people they do business with are properly authorised."
The FLA also asked attendees if they expected to see a contraction, and most said they expected to see some in some parts of the market.
Sklaroff said; "The problem most people have is not knowing exactly where that is going to happen. We would be very surprised if that directly affected our own members, but you might see some consolidation in the intermediary markets."
Fiona Hoyle, head of consumer finance at the FLA, noted that one of the FCA’s key points at the conference was to not under estimate how long it will take to prepare for authorisation.
She said: "They (the FCA) are having a dialogue and they’re keen to emphasise that the process is a dialogue. A lot of firms will be looking at the permissions, double checking if they have the right permissions, so this sounded like a constructive approach for them to take."
Summarizing the findings of the conference, a spokesperson for the FLA said; "The impression from our series of conferences is that the industry is getting on with the job of preparing for authorisation. They’ve had to cope with a very short timetable – only a year ago we were looking at draft rules and now we’re six months into the live regime. They all have their "landing slots" and they’re focused on what they need to do to get their applications ready.
"For the FCA’s part, they are clearly aware of the challenge of getting 49,000 firms through the authorisation process in around 18 months, and have increased the number of staff working on the project. Engagement with the industry is good and they seem – helpfully – to be treating the authorisation process as a dialogue. We want this to continue."