Limited or Full Permission - What you need to know to apply for FCA authorisation
Taking the first steps towards authorisation with the FCA can seem daunting; the latest in our series on FCA compliance is aimed at helping firms decide which type of permission they need to apply for.
Any firm carrying out a regulated activity must be authorised or registered by the FCA - to carry out a credit related regulated activity in the UK without the necessary authorisation from the regulator is a criminal offence. Ultimately, if you're in any doubt about whether you're currently carrying out regulated activities and might need to apply for authorisation, it is recommended that you seek expert external advice. In short though, if you're a lender, broker, engage in debt counselling, debt collecting or debt administration, it's likely you'll need to be authorised by the FCA.
Firms that undertake consumer credit work are able to apply for one of two categories of authorisation - limited permission, or full permission. The FCA's Perimeter Guidance (PERG) sets out guidance on permission types and anyone applying for authorisation requires a good understanding of the guidance – if in doubt, contact an external expert. Your application can be delayed by up to six months if you apply for the wrong permission category, so choosing the correct permission type is vital.
Whether a firm needs full or limited permission depends on a number of factors, including the types of activities your business carries out.
Consumer credit lending - where the main business sells non-financial services or goods and no interest or charges apply (except hire-purchase or conditional sale agreements)
Credit broking - where the main business sells non-financial services or goods, and broking is a secondary activity.
Not-for-profit debt counselling.
Not for profit debt adjusting.
Not-for-profit credit information services.
Consumer credit lending (as the main business)
Credit broking (as the main business, or where the sale takes place in the customer's home)
Providing credit reference agency services.
What do they mean?
Firms applying for either type of permission may make some assumptions about the terms 'limited' and 'full'. Limited permission is generally a shorter application process, and involves a lower application fee than applying for full permission, but firms should not make assumptions that applying for a limited permission involves the submission of fewer documents or exempts a firm from parts of the regulations. Whilst you will generally need to submit fewer documents at the point of application, be wary of assuming you won't need to be able to prove compliance with the regulatory toolkit 12 months from approval.
Applying for full permission means that the firm will need to supply the FCA with information in a business plan, along with information about the firm's activities, history, future plans, financial details, systems and controls and approved persons.
If you think your firm may need to apply for permission, the next step is to check out the information available on the FCA website.
Our FCA authorisation guide sets out all the audit areas you’ll need to consider when preparing to be regulated by the FCA