FSA may look again at 2013 capital adequacy deadline

Hector Sants today said the Financial Services Authority (FSA) may revisit the deadline for investment firms to meet new prudential rules.

Speaking at the regulator's annual public meeting, the FSA chief executive said: "We are carefully considering whether we should be revisiting the timeline around that. It is one area where further thought is justified."

The deadline for the new rules, which were finalised in 2009, is currently 31 December 2013, a year after RDR.

Sants also re-stated the RDR would not be delayed.

Under the new prudential regime for personal investment firms (PIFs), firms must hold capital resources equal to at least three months of their annual fixed expenditure in readily-realisable assets, such as cash.

The minimum capital resource threshold for any firm will be set at £20,000, double the previous £10,000.

Some firms have expressed concern about the timing of the new requirements, given the economic conditions of the past few years.

Other concerns relate to the FSA's definition of 'fixed' expenditure.

Sants's remarks follow concerns expressed by the Small Business Practitioner Panel about the prudential rules this week.