Megan Butler, the director of supervision at the UK's Financial Conduct Authority, has outlined plans for an FCA asset management 'authorisation hub.'

She told the audience at a gathering yesterday: "A traditional critique of regulation is that a lot of red tape tends to protect incumbents from competition by putting off new entrants to the market."

Never a truer word was spoken in the history of financial regulation, but Butler added that the FCA was interested in slowing down the rapidly advancing trend in favour of barriers to entry that characterises modern regulation. One way of doing this, she believed, was through a piece of software and the allocation of some extra FCA staff man-hours. With this in mind, she announced that the FCA was going to build an asset management "authorisation hub" to support new entrants to the market.

The beneficial hub - to be made up at least partly of human beings and not totally automated - will "help start-ups as they move between pre-authorisation and authorisation, and on to regular supervision."

The hub's objectives

Butler talked about wanting to build a user-friendly "system of support" and to base it on the following four 'principal' (a word she never explained or used again) objectives.

• The FCA wants to clarify people's expectations (presumably about authorisation), make the guidance (i.e. the interpretation of regulations) in its rulebooks better and, indeed, make 'processes' (whatever those may be) better as well.
• It wants to make information (presumably about the way it authorises firms to do business) easier for start-ups to find by means of a dedicated portal for investment managers on its website. This portal is to be the automated part of 'the hub.'
• The FCA wants to talk to and co-operate with market entrants in a better and more personal way.
• Support for firms from end to end of the start-up process (Butler used the word 'cycle,' as if to describe something that repeats itself) is also an aim.

Next phases for the hub

The hub is going to appear in phases and the first phase will occur next month. At this point the FCA will invite new firms to pre-application meetings and will offer them a battery of dedicated case officers and access to the website portal. On top of this, it is promising to make it easier for firms to speak directly to its supervisors after - as well as before - it authorises them to do business.

Next year, the FCA wants to extend the hub (which Butler also described as an offer) to include quarterly surgeries, online booking for pre-application meetings, and perhaps other types of support. The idea of regulators, like doctors, holding 'surgeries' must have amused the audience.

The FCA, as part of the hub or not, also plans to publish more detail than it does at the moment about criteria for 'entry' (presumably another reference to authorisation to do business) and application details. This might become the most helpful part of its new policy.

A widening hub?

Before moving on to a lengthy rehash of common FCA talking-points regarding the Senior Managers' Regime and MiFID, Butler had one last useful revelation to make: the FCA might, at some time in the future, spend more money and man-hours to help start-ups in other parts of the financial sector as well.

She said: "As you may know, we already successfully operate a new bank start-up unit with the PRA. Over time, we’ll take a view on whether it would be beneficial to continue to expand this kind of support even more widely."