The average length of time it takes for new financial firms to receive authorisation from the Financial Conduct Authority is taking nearly six months, according to data obtained by City law firm Reynolds Porter Chamberlain.

The average length of time it takes for new financial firms to receive authorisation from the [tag|fca|]Financial Conduct Authority[/tag] is taking nearly six months, according to data obtained by City law firm Reynolds Porter Chamberlain.

According to the data, in the second quarter of 2013 the average time taken for financial firms to get FCA approval was 25.8 weeks, 6 per cent longer than the previous quarter.

“If the FCA continues to scrutinise new start-ups much more rigorously than its predecessor, then we can expect to see long authorisation times becoming a big problem," said Richard Burger, partner at RPC.

The data revealed that the figure of 25.8 weeks is the second highest in the past five years and almost twice as long as the 13.9 weeks taken to authorise a new firm in the second quarter of 2008.

“Such are the delays in getting approval from the regulator that many very viable financial services businesses never get off the drawing board," said Burger.

“Obviously the regulator wants to ensure quality control over the business plans and the management of new businesses, but they also need to weigh that against the costs and uncertainties that the approval process causes for new businesses," added Burger.

The FCA said in a statement that it was working with trade bodies to ensure that applicants understood how they could demonstrate they meet requirements, which will enable applications to be considered more quickly. 

“We are constantly seeking to improve the efficiency of the authorisation process but there is a balance to be struck between speed on the one hand and protecting consumers and the wider financial system on the other," the FCA said.