FCA Application Guidance – Key Points
For any firm – large or small – completing and submitting an application for Financial Conduct Authority (FCA) authorisation is a formidable task. Authorisation is needed for any new firms entering the market, but those leaving a group and firms that come under the FCA’s remit as the perimeter widens must also seek authorisation.
Applying is not a tick-box activity – it requires preparation and the collation of a large number of documents, including personnel, financial and strategy documentation. The key is to get started as soon as possible with the aim of constructing a fully complete application – the FCA aims to have completed application decisions available within 6 months; incomplete applications can take up to 12 months and firms cannot conduct business without the appropriate authorisation.
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Whatever the type of authorisation, the nature or the size of business, there are a few common – and simple – steps that everyone needs to take to make sure the application is submitted correctly the first time around, potentially saving up to six months additional waiting time and extra resources.
Initial research is vital. Understanding the application process, what’s required and what it will look like from start to finish, before you begin, will save a lot of time in the long run. Depending on the authorisation being sought, the requirements and criteria will differ. Check out the FCA website for detailed information on the different types of permissions and their specific requirements.
Collation of documentation must be comprehensive; treat this as a standalone project in its own right. Unsurprisingly, a wide range of documentation is required by the FCA, who will use it to check everything from financial stability to company values and accountability of senior personnel. Documentation to be submitted will include financial statements, business plans, and information on key personnel. Gathering all of the required documentation – and reviewing how well they match FCA expectations – can help to avoid delays. Be aware, in the past it may have been possible to omit one or two elements from the application and still achieve authorisation, this is no longer the case. The FCA now reviews business plans in great detail, expecting clear information on exactly how your products and services will work, the processes which support these, why they are beneficial for the target market and how you’ll avoid causing harm. Your financials must reflect the business plan.
When it comes to completing the application form, don’t take short-cuts. Although it sounds obvious, carefully reading through the instructions before beginning, and providing all of the information requested will help the process go smoothly. Incomplete or inaccurate applications will delay the process or result in a rejection. It is essential to include all documents associated with each senior manager application as well, such as statements of responsibilities, skills-gap analysis and training plans.
Once the application form has been completed – and checked - and all necessary documentation has been gathered, then the application can be submitted through the FCA's online portal.
Finally, after submitting your application, the FCA will review your submission and make a decision. This process will take several months, and we’ve seen a significant increase in the level of questioning, so be prepared to respond to probing questions surrounding your product and business processes. The FCA will notify you of its decision, and if your application is successful, you will be granted the appropriate authorisation or registration.
A successful application reflects the Regulator’s satisfaction that your firm can meet the threshold conditions, and that it is confident that your firm can responsibly do business. More than that, holding FCA authorisation in 2023 is a commitment to the fair treatment of your customers.
If you’re thinking of applying for FCA authorisation and need to understand more about the process, common mistakes and pitfalls to avoid, you can contact us at: Robert.bell@rbcompliance.co.uk
Those applying for FCA authorisation need to make sure that all the conditions are met first time, and evidence that they’ve embedded all the requirements before the application is submitted. With the Consumer Duty implementation period now underway, having a clear understanding of the background, expectations and required actions is vital to the success of 2023 applications. Our Consumer Duty Compliance Resources including free webinars, are ideal for those needing to get to grips with this complex and wide-ranging new initiative.
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