Key things you need to know about FCA authorisation

4th December 2018 3210 - Blog Posts

To carry out regulated financial activities in the UK, including dealing in investments and advising on investments, fund managers must either be directly authorised by the FCA or become an appointed representative. If you decide that FCA authorisation is the best route for your firm, there are a number of considerations to make your application successful.

What you require for FCA permissions

Most FCA authorisations will require some or all of the following:

  • A core details form, including business structure and business continuity plans
  • Supplemental information including a full regulatory business plan, cashflow projections and information about personnel.
  • Forms for approved persons carrying out controlled functions and forms for controllers who hold or control more than ten per cent of the entity.
  • IT controls form
  • Supporting documents including compliance procedures.

Expected timescales for FCA authorisation

Forms are lengthy, so it pays to do some prior research and dedicate plenty of time to completing them. The FCA has six months from the date of submission to deem an application as complete and twelve months to determine an incomplete application. Last December, the FCA launched a consultation period to try and make it ‘easier and more intuitive’ for firms to submit complete applications, which is still underway. Currently, obtaining FCA permission is still time consuming and complex but Lawson Conner can manage the entire process if required. We can provide the regulatory infrastructure which includes the FCA application, all necessary policies and procedures, compliance software as well as the regulatory business plan and financial model.

Be precise about your business model

To be successful with FCA authorisation, you need to be very precise about your business model and the products and services that you will be offering your customers. The fundamentals of your business model drive your regulatory permissions, your capital and funding requirements and your approach to risk management, so it’s important to get it right.

Expect to answer further questions

As part of the process of FCA authorisation, the regulator will ask further questions and probably request additional documentation after your application has been submitted. Detailed answers need to be provided in a timely fashion in an upfront and transparent manner. Lawson Conner can handle the entire FCA authorisation process, including dealing with subsequent enquiries and engaging with the FCA to ensure that your application runs smoothly.

Applying for a variation of permissions

If you wish to change the scope of the business or add a regulated activity, you need to apply for a Variation of Permissions through the FCA. Applying for a Variation of Permissions can also be a lengthy and onerous process which can take between six to eight months, but it is important to get it right because a failure to report an extension of activities is considered a breach of FCA rules. As with FCA authorisations, Lawson Conner can handle the entire Variation of Permission application, using our skills and regulatory expertise to submit a complete and successful application.

Latest developments in the FCA authorisation process

The current climate has necessitated some changes in the process of obtaining FCA authorisations and permissions. For example, the FCA is currently consulting on its preparations for the UK leaving the EU without a formal Brexit deal in place, and it is providing more clarity on its Temporary Permissions Regime in this scenario.

Earlier this month, the FCA also promised greater emphasis on the non-financial conduct of approved persons when it considered authorisations. It announced that the Senior Managers and Certification Regime (SMCR), which currently applies to bank, building societies and credit unions, will be rolled out to all authorised firms from December 2019. The regime aims to strengthen market integrity by making individuals accountable for their conduct and competence.

Lawson Conner’s dedicated team of experts can provide a comprehensive and well prepared FCA authorisation application for your firm, which can significantly speed up the approval process. To reduce the burden of completing FCA paperwork and minimise the risk of submitting an incorrect or incomplete application, contact us today.