Mr Rathi has also pledged to shake up how the regulator measures the time taken for new authorisations after long backlogs became apparent this year.
 
He confirmed additional scrutiny of selected applications in a letter this week to Andrew Griffith, Economic Secretary to the Treasury, in which Mr Rathi noted there was “room for improvement” on authorisations and the time taken to authorise applications. Mr Griffith wrote to Mr Rathi asking for a progress report on authorisations.

Some of the changes follow the damning Gloster Report on weaknesses at the FCA in many areas, including authorisation. She said there was a lack of 'holistic' consideration of business and individuals applying for authorisation. Her report was commissioned following the LCF mini-bond debacle which saw thousands of consumers cheated out of their savings.

Mr Rathi said in his letter to Mr Griffith: "From time to time, we have set ourselves voluntary service standards for high volume applications where we believe it is reasonable for firms to expect quicker determination times than the statutory standard. Currently we have voluntary standards for approved persons, appointed representatives and payments agents.

"Following the recommendations of the Gloster report we now apply additional scrutiny to these applications which means the historic voluntary standards are no longer appropriate. Rather than set new voluntary standards we will achieve a greater level of transparency by publishing the average determination times for each of these categories of application."

In his letter Mr Rathi confirmed the following changes to authorisations and authorisation performance metrics:

• Authorisation determinations for approved persons, appointed representatives and payments agents will have “additional scrutiny”. 
• Authorisation service metrics will be published quarterly rather than annually. The FCA expects significantly improved determination times overall by March.
• The FCA will publish more detail on the time taken to determine applications, including determinations taking longer than expected due to their complexity and the need for more checking. It will also publish lower, median and upper quartile times taken for determination in each category of application, including SMF, customer function, appointed representatives, new firm authorisations and variation of permissions.
 
Mr Rathi said in his letter that he wanted the FCA to be, “a more innovative, assertive, and adaptive regulator.” Mr Rathi has also appointed a chief operating office responsible for operational effectiveness and efficiency to improve performance.
 
In response to a letter from Mr Griffith asking for a progress report, he said in the past year the FCA had reduced its pending authorisations caseload by 50%.

There are also indications that the FCA is also rejecting more applications. Mr Rathi pointed out in his letter that one in five applicant firms did not receive authorisation in the last financial year, up from one in 14 the year before.
 
The FCA will also review its voluntary service metrics to determine whether they remain appropriate. Mr Rathi said the new-look data on operational metrics will need to be agreed by the FCA board and details of the new approach to metrics data will be published in the new year.