Many of our products and document templates are currently being used to supplement compliance programs to enable firms to meet the FCA requirements for authorisation and to ensure their compliance with the rules as covered in the handbook.
Whilst we do not act as a consultant in helping firms to complete their applications, we have extensive knowledge of the FCA requirements and handbook sections and have created our products to ensure that these requirements are met. We have given some guidance below on FCA authorisation and how we can help with your compliance program.
Preparing for Authorisation
The FCA Handbook and supplementing Sourcebooks can seem quite daunting at first and the new regulatory regime is certainly more complex than it’s predecessor, however once you get a firm understanding of the handbook, their rules and the FCA’s expectations; you will be able to build a compliance program that will benefit you as much as it does the regulator.
The easiest way to start preparation for FCA authorisation is to work out which of the handbook and sourcebook sections apply to your firm based on your business type (remember: not all of the FCA sections are rules for all firms). Once you know this, you will be able to see which rules apply to you and then start to build policies and procedures to ensure that these rules are met and complied with.
There are many minimum regulatory requirements that are seen as the bare minimum expected of all firms, and then many additional rules that must be followed dependent on your business type and the products/services you offer.
Ensure that you know who you Approved Persons will be and that they have the adequate and relevant skills, knowledge and qualifications to fulfil their role under the Controlled Functions.
You should already have received the FCA’s Full Permission Checklist and Full Consumer Credit Application Guidance Notes documents with your application pack, however we have also provided them for you to download below.
As you application period approaches, you will receive an Application Pack from the FCA which will contain your application form and supplementing guidance notes. These notes provide guidance on how to complete the application form and what documents you must either supply with the form or have ready should the FCA request them.
One of the most important documents that is to be completed and supplied with your full authorisation application, is the Compliance Monitoring Document (see our template and supporting policy & procedure). This document is basically a record of all the procedures that you have in place to comply with the regulatory rules, your own business requirements and any other governing requirements. You will usually not have to supply all of the actual documents to the FCA with the application, however you must have all of the documents ready should they be requested.
Many of the application questions ask if a certain handbook section or rule applies to your firm and if it does you must provide a summary or explanation of how you meet the requirement. It is much easier to complete these questions if you have the relevant policy, procedure and records in place, as you can use that content to provide you summary and send a full copy as evidence if required.
The documents that make up your compliance program will be bespoke and customised to your firm (e.g. your BCP and DR), however the aim of many of the FCA rules is to ensure that a standardised approach is achieved by all FS and CC firms. This means that many of the compliance procedures, policies and firms can be purchased from KYC as templates and then edited to make then your own.
We do not provide all of the documents that you will need for Full FCA Authorisation Application (as many are bespoke to you), however, we have created a large number of documents that meet the FCA requirements and which can be amended to include your own specific procedures when it comes to complying with the rules.
Just a few of the KYC documents that can hep with your FCA authorisation application and compliance program are:-
- Compliance Monitoring Document & Supporting Audit Procedures
- Compliance Policy
- Complaint Handling Document Set
- Risk Management Document Set (inc Matrix & Risk Register)
- Treating Customer Fairly (TCF) Policy
- TCF Audit Checklist (for TCF self-assessment)
- TCF Interactive Dashboard (for TCF self-assessment)
- Outsourcing Policy
- Due Diligence Questionnaire & Checklist (for suppliers & clients)
- Anti-Money Laundering Policy & Procedures
- Remuneration Policy
- Conflicts of Interest Policy
Consumer Credit Firms
If you are a Consumer Credit regulated firm, you will also need to comply with some/all of the CONC Sourcebook rules and requirements. We have many products which can be included in your compliance program and referred to in you FCA Authorisation Application as they relate specifically to being a CC firm. Below are just a few:-
- Continuous Payment Authority (CPA) Policy & Procedure
- Arrears Policy & Procedure
- Introducer Agreement
- Vulnerable Customer Policy
- Communication & Financial Promotions Document Set
- Cancellation Policy
- Distance Marketing Policy
- Affordability Assessment Calculator
- Responsible Lending Policy
- Financial Difficulties Policy & Procedure
In the application guidance notes, the FCA refer to your Compliance Manual and provide guidance on the minimum requirements that should be included for all firms. It is also essential to include all staff guidance and procedures to meet any other regulatory requirements and rules that may apply to you dependent on the business type you fall under.
You can read more about the KYC Compliance Manual by clicking the link and find out how this comprehensive document will not only help you to exceed the FCA’s minimum requirements, but also includes reference information on many FCA handbook areas for your staff to read and the CONC sourcebook requirements for Consumer Credit regulated firms.
Initial Disclosure Documents
If you are a regulated firm who is obligated to provide your customers with disclosure documents, you can find a great tool over on the FCA’s website which will provide you with a free IDD template in a word document format. Your IDD must be sent in with your initial authorisation application, so using the FCA’s own template is a great way to ensure that you have all of the relevant and required information on the document.
You can find the FCA’s Initial Disclosure Document by searching their website.