Abolition of FSA will hit landlords

The news, announced by chancellor George Osborne in a speech to senior City figures last week, introduces significant uncertainty for associations because industrial and provident societies have to register with the FSA. If they are not included on the register of friendly societies - including building societies, credit unions and other financial organisations which benefit society - they would not be able to operate.

The FSA registers associations’ rules, amendments to rules, files their annual returns and maintains public records. Associations are required to notify the authority of any merger or significant change in their structure.

The uncertainty has arisen because the government has admitted it does not know which organisation will take over these responsibilities when the FSA is axed. Changes to regulation are expected to be complete by 2012.

Lawyers suggest that other regulatory bodies, such as the Charities Commission or Companies House, are not set up to provide the same service.
Emma Tarran, partner for governance and charities at Trowers and Hamlins, said she could not imagine that the role would cease to exist ‘because it is an important one and would need a fundamental change of law to alter it’.

She said: ‘The issue of who the registrar is will affect a lot of housing associations.’ She added that the Charities Commission would not be able to carry out the function because some housing associations are not charities.

Companies House, which registers limited companies, could take on the role, but James Tickell, of consultancy Campbell Tickell, voiced concerns that its staff may not have the mindset to deal with non-profit-making organisations. Mr Tickell said the laws regulating companies and industrial and provident societies are very different, meaning Companies House staff would be unlikely to have the training necessary to deal with I&Ps.

An FSA spokesperson said: ‘All the finer details of the changes have yet to be resolved. We will work closely with the government to minimise disruption.’

A Treasury spokesperson said a consultation paper looking at all the options for the FSA’s functions is currently being drawn up.

The government announced on 16 June that the FSA will be abolished and powers for regulating the banks handed of the Bank of England.

The news follows the government’s decision to to close social housing regulator, the Tenant services Authority.

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