Brokers cancel efforts to be authorised advisers

More than one in 10 brokers have withdrawn their applications to become authorised advisers under a new system of regulation.

The Central Bank claimed it had not refused 100 of the 800 firms who sought the registration but said the applications "never got to the stage" of being granted. This followed detailed consultations with the Bank, a spokesman said.

The conditions required to receive registration as an authorised adviser are believed by industry insiders to be relatively strict and it is thought the 100 brokers who withdrew their applications to be authorised advisers were now seeking to become restricted intermediaries.

Of the remaining 700 firms, which will be registered as authorised advisers, only 70 have been formally registered by the Bank so far. That includes 25 registered in recent days.

Such firms are authorised to provide advice on the entire investment and insurance market.

The Central Bank assumed responsibility for the regulation and supervision of insurance intermediaries a year ago.

According to the Central Bank, 1,650 restricted intermediaries will be registered. Under a new element of the regulation recently introduced, 1,500 of those will be allowed to provide advice about products sold by a number of companies specified in their registration.

The activities of the remaining 150 will be confined to advising about products sold by only one company.

The 2,250 companies that the Central Bank expects to register amount to less than a third of the 9,000 mooted when the Department of Enterprise, Trade and Employment was transferring responsibility to supervise the sector to the Central Bank.

The Bank itself initiated correspondence with 6,000 firms, indicating that more than half had either ceased to trade or decided against pursuing formal registration.

The chief executive of the Irish Brokers' Association, Mr Paul Lynch, said this probably reflected the fact that certain auctioneers and estate agents, who may have carried out limited part-time work in the sector, decided against continuing in the new regime.

In addition, he said the reduction probably reflected retirements and the amalgamation of firms. Mr Lynch said the association represented about 650 members.

"The new regulations haven't driven any of our members out of business," he said.