No enforcement action yet on referral fees, SRA says

No enforcement action has been taken yet over a breach of the referral fee ban, a spokesman for the SRA said today.

He explained that until some action was taken, no data would be available on the conversations taking place between firms and their regulator since the ban came into force on 1 April.

However, he said the ban had led to the SRA telling some businesses applying for an ABS license to "go back to the drawing board".

Earlier this week, Agnieszka Scott, director of policy at the SRA, said the regulator "was never going to take a heavy-handed approach" to the ban.

"We said we would show understanding to those firms that wanted to comply, and that's the approach we are taking," Scott said.

"We will be having less understanding conversations with those firms that show no willingness to comply.

"There is also a need for understanding our position too. We are fully committed to helping firms remain compliant and therefore engaging with them on adjustments to their business model.

"But by the same score, the outcomes dealing with the referral fee ban carry no more or less weight than any other outcomes in the Code of Conduct. Our approach to enforcement and compliance, including any sanctions in the light of proven wrong-doing, remain the same."

The SRA has incorporated the ban into the Code of Conduct through two new mandatory outcomes, stating that "you are not paid a prohibited referral fee" and "you do not pay a prohibited referral fee".

The code defines 'referral fees', while 'indicative behaviours' illustrate how outcomes can be achieved.