The Financial Conduct Authority has avoided potential trouble in identifying firms as it begins to allocate the first seven-digital Firm Reference Numbers (FRNs).
The FCA was well into the 999900’s with its FRNs but has avoided causing chaos for many financial advisers by not using the FRN 999999.
FCA-regulated firms have been allocated numbers sequentially from 2001 onwards.
However, since 2001 many providers have been using the FRN number 999999 to allocate direct and orphan business not attached to an advisory firm on their systems.
Many providers are believed to be using the dummy FRN 999999 which meant any business allocated by the FCA to this number could have been allocated to a real firm with the number 999999 if it had been used.
The regulator wrote to regulated firms on 29 June to advise that they were about to allocate the first seven-digit number from July. The FCA had to begin using 7-digit numbers after running out of 6-digit numbers.
Andy Marson at industry consultancy Autus Data Services saw the potential for vast quantities of policies being automatically and unknowingly allocated to a brand new and incorrect intermediary firm by the provider systems when a real 999999 firm appeared.
He said: “Dozens of providers would than have had to use scare resources re-allocating all of that business to a new dummy number. Not easy for any firm, and a huge amount of work for organisations that have acquired others or merged over the last 20 years and are still running legacy systems.
“Autus informed the FCA of this risk (which they were understandably unaware of) on the same day. To their credit the FCA intervened to make sure that the 999999 was not used and the first seven digit numbers were allocated less than 3 weeks later.
“Many of us are old enough to remember the Y2K non-event, but this intervention has undoubtedly saved the industry a lot of time, effort and money in the corrective action that would have been required had Autus and the FCA not identified and addressed the impending risk.”
All authorised firms are required to have an FRN, a unique identifier. Over 1m six digit FRNs have been used.