Online deadline looms for finance firms

The UK financial services industry will have to start providing online reports of regulatory information from April next year.

Thousands of firms currently manually submit paper-based reports to the Financial Services Authority (FSA), ranging from operating information about regulated markets, to suspicious activity that could be potential money laundering.

But from April 2005, the FSA will start the transition to its Integrated Regulatory Return (IRR) system, affecting tens of thousands of companies when it is fully implemented, such as banks, investment firms and stockbrokers.

IRR is likely to provide an opportunity for some firms to streamline and improve their processes, but could add to the data management burden for smaller companies, say experts.

The FSA says firms can either submit information via an online form or through a direct system-to-system transfer, based on a business reporting language called XBRL.

FSA managing director for regulatory services David Kenmir says the system will align reporting periods with firms' financial years to help them make more use of the information they already have to generate.

'The new system is an important development in the FSA's aim to be an organisation which is more effective and easier to do business with,' he said.

The transition will start with approximately 20,000 mortgage and insurance brokers that are due to become regulated businesses between October 2004 and January 2005.

No final compliance deadline for the remaining 12,000 regulated providers has been set, but the FSA is working with the IT industry to ensure a smooth transition.

'It is critical that work needs to be ongoing to ensure that the industry and the FSA develop a comprehensive understanding of the IRR requirements and the technological solution,' said Chris Wood, chairman of trade body Intellect's financial services committee.