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FCA Authorisation Guidance
FCA Authorisation Application
Who is Authorised by the FCA?
Businesses who provide consumer credit services, financial service providers and investment firms must be authorised by the Financial Conduct Authority (FCA). The oversight and enforcement powers granted to the FCA are made under the Financial Services and Markets Act (FSMA) 2000. Authorisation is based on the products and services provided by the company, as well as their activities. Details of which activities are regulated are specified in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.
Company size or structure does not determine who needs to be authorised. Sole traders, not-for-profits and corporate entities must all go through the FCA application process to become authorised. It is a criminal offence to carry out a regulated activity without authorisation. Some sectors within the 3 main regulated industry types are dual regulated by both the FCA and the Bank of England’s Prudential Regulation Authority (PRA). Credit unions, banks and insurance providers must comply with both regulatory bodies.
If you are considering carrying out a regulated activity, read through the FCA’s Perimeter Guidance Manual (PERG). PERG provides information and advice on who and which activities need to be authorised. It also offers guidance on exemptions and permission types. The manual includes useful ‘Do I Need to be Authorised by the FCA’ decision tree.
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FCA Permission Type
Financial service providers and investment firms are required to have full permission authorisation through the FCA. However, there are 2 categories of permission open to consumer credit firms. Limited permission and full permission are dependant on the types of regulated activites being undertaken.
The application process for limited permisson is generally less intensive than for full. However, this does not negate the need to have a complete FCA policy compliance program in place.
How Do You Apply for FCA Authorisation?
The FCA authorisation application process is in-depth and requires applying firms to meet the high FCA compliance standards. It is essential that applicants understand their obligations under the regulatory regime. Likewise, knowing which activities you intend to carry out and which services will be offered should inform your application decision and process.
The FCA provides authorisation application guidance on their website. This includes guidance notes for limited and full permission applications. However, firms are encouraged to seek legal or professional advice if they are unsure of their regulatory obligations. Prior to application, firms should ensure that they meet the minimum standards set out by the FCA. This includes assessing compliance with the Threshold Conditions, FCA Priniples and the mandatory rules under the Systems and Controls (SYSC) module of the Handbok.
Once you have confirmed that you meet the minimum FCA authorisation requirements, collate the mandatory documents and develop your FCA Compliance Manual. This is set of policies and templates that aid your compliance with the standards. See further down the page for more details.
Application submission is carried out online via Connect. Applicants are prompted to choose which firm type they are regisering under. This ensures that the application process is tailored to the activites and services being providing. General company information is also required during application, such as a regulatory business plan, company structure and financial resources.
The FCA Application Process
The FCA authorisation process is not quick. Therefore, you should be in a position to wait up to 6 months for the application to be processed. It is a criminal offence to carry out any regulated activity prior to becoming authorised. For applications or submissions that are incomplete, applications can take up to 12 months. This further emphasises why the initial preparation is so important.
Firms are assigned a case officer once they have submmitted their FCA application. The case officer may require more information or additional evidence to support the application. If the authorisation application has been approved, the FCA send out written confirmation of the ‘Part 4A permission’ to carry out the applied for regulated activities. The business will also be added to the Financial Services Register.
Where a firm does not meet the minimum standards for authorisation, the FCA will provide written reasons for their decision. Firms can resubmit their application once they have addressed and resolved the reasons for rejection.
FCA Policies & Documents Required for Authorisation Application
The FCA’s full permission guidance notes provide details on what policies and documents a firm should have in place prior to submitting their application. These are in addition to ensuring that the threshold conditions and principles have been met. Below are some of the main requirements needed to apply for a FCA authorisation: –
The list on the right not exhaustive with certain areas requiring more than a single policy to comply. For example, the financial crime requirements also incorporate due diligence, anti-bribery and risk assessments.
FCA Policy Templates to Download
Know Your Compliance Limited have spend the past 9 years providing regulatory policy templates and manuals to companies just like you. We specialise in FCA compliance solutions and have manuals, policies and tools ready to use. With over 6000 organisations already using our policy templates, we can accelerate your FCA application and support your ongoing compliance.
- Regulatory Business Plan
- Outsourced Functions Register
- Risk Management Policy
- Treating Customers Fairly Policy
- Vulnerable Customers Policy (where applicable)
- Complaints Handling Procedures
- Anti Money Laundering & Financial Crime Policy
- Business Continuity Plan
- Conflicts of Interest Policy
- Distance Marketing Policy
- Financial Promotions Policy
- Client Communication Policy