FSA to end audit requirements

News Article - 28 July 2006
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A proposal to reduce the regulatory burden on small businesses has been welcomed by the Department of Trade and Industry (DTI).

The Financial Services Authority (FSA) recommended the change – which will affect small firms and Appointed Representatives (ARs) – as part of a drive towards clearer regulation.

It is estimated that a total of £12.9 million will be saved by some 3,200 small companies and 1,490 ARs each year.

Stephen Bland from the FSA said of the plan: "The FSA is committed to providing a level playing field for all regulated small firms which should promote competition and benefit consumers.

"We are challenging regulations whose costs outweigh the benefits they bring, and our work with the DTI to extend the audit exemption will bring firms that are limited companies in line with partnerships and sole traders," he added.

The change, likely to apply to financial years ending on or after the last day of this year, is expected to mainly be of benefit to financial advisers.

In response to the proposal, the DTI has said it will implement the change by amending the Companies Act 1985, and has pledged to do so as soon as possible.

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