- mortgage and general insurance intermediaries – undertaking mortgage
mediation and insurance mediation activities; and
- firms who have historically been identified as Personal Investment Firms.
Firms conducting mortgage lending or mortgage administration that also conduct
the above activities are required to complete the relevant sections of the RMAR
in addition to other data requirements.
Collection of data
The data will have to be collected from 1 April 2005, with the first submissions
starting in July 2005 (depending on the firm’s accounting reference date).
More information on the FSA’s phased introduction of mandatory electronic
reporting is available on their website at www.fsa.gov.uk/pages/Doing/Regulated/Returns/IRR
For firms carrying on the activities referred to above, the following information
will be collected:
| Financial information |
Including:· balance sheet;·
profit and loss account (including commissions and fees);· regulatory
capital;· information on the operation of any client money accounts;
and· information on professional indemnity insurance cover. |
| Threshold conditions |
Confirmation of compliance with certain of our threshold
conditions. |
| Training & Competence |
Information on the number of advisers and their qualifications. |
| Conduct of business information |
Including data on the monitoring of any appointed representatives,
details of clawed-back commission and an indication of sources of business. |
| Supplementary product sales data |
Supplementary data on transactions where this is not collected
by product sales data (this only applies to firms carrying on insurance
mediation activities). |
| Fees data |
Information required for the calculation of fees for
the FSA, FOS and FSCS. |
| Complaints data |
Information about complaints received by firms from their
customers. |
Most firms will already be collecting much of this data for their own management
purposes; however, they will need to ensure that the information collected is
compatible with the reporting requirements. Some data items may be, so firms
should ensure that all necessary data is captured.
A full listing of all the data items required in the RMAR is available from
the Integrated Regulatory
Reporting (IRR) section of the FSA website: www.fsa.gov.uk/Pages/Doing/Regulated/Returns/IRR/versions/index.shtml
Frequency of reporting
Generally firms will be required to submit this information to the FSA electronically
every six months. However the following exceptions apply:
- Larger firms will be required to report financial information quarterly.
For the purpose of these reporting requirements, ‘larger firms’
are those with an annual income of more than £5m for their retail mediation
activities.
- For the first year following the requirements being implemented, the FSA
will not require smaller firms to submit financial information at their half-year
end (i.e. for the six-month period following their accounting reference date).
The FSA have granted this exemption to give smaller firms more time to adapt
to the requirements, and put in place procedures to collate and submit information
without necessarily using external accountants.
However, smaller firms still have to submit the remaining RMAR sections
half yearly. For this purpose, the FSA have defined ‘small firms’
as those with annual income of £60,000 or less in relation to their
retail mediation activities.
- Personal Investment Firms subject to the ISD may be required to report more
frequently, in line with the Directive requirements.
Submission of first return
Firms are required to collect data from 1 April 2005 and, as stated above, report
it twice a year based on the firm’s accounting reference date (ARD). Firms
will therefore have to submit data to cover the two six-month periods before
and after their ARD. The FSA will require the information within 30 business
days of the end of each period.
For example, if a firm has an ARD of 31 December, it must report twice a year
based on the following periods:
- 1 January – 30 June; and
- 1 July – 31 December.
While a firm with an ARD of 31 March would have the following reporting periods:
- 1 April – 30 September; and
- 1 October – 31 March.
As the reporting requirements do not come into effect until 1 April, the first
reporting period may be less than a full six month period for some firms. Firms
will be able to view their submission timetable by accessing the reporting timetable
menu on the Firms Online system from July 2005.
It is important for firms to note that the reporting requirements are subject
to strict time limits under the FSA’s rules. If firms do not meet these
time limits, the FSA are proposing to charge firms an administration fee of
£250. If a firm still does not submit the information required, the FSA
may take enforcement action, which can result in a firm losing its permission
to carry on regulated activities.
The RMAR must be submitted electronically, using the web-based reports available
through the ‘Firms Online’ system. This is a new system that is
available to authorised firms through the FSA’s website. Firms can log
onto the system and use it to:
· view their ‘firm profile’ – i.e. a summary of information
such as standing data, regulated activities and approved persons;
· access various electronic forms; and
· submit regulatory returns.
Role of the auditor
The auditor has no formal involvement in the RMAR. However in practice, many
small firms are struggling with completion and asking their auditors for assistance.
Audit partners and managers should therefore ensure that they know which clients
will have to submit a return: there is then an opportunity to be proactive and
offer help that can be planned rather than reacting to a frantic call for help
a few days before the return is due.