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  • Robert Bell

FCA Applications

The FCA are now in the process of updating some of the most commonly used Connect forms with Form A – used to apply for Senior Management Functions and Controlled Functions – first up for public launch. The regulator’s hope is that the revisions will make for a more intuitive and responsive task, making the preparation and submission of the forms far more efficient.

An updated Form A is being rolled out for public testing now and the FCA are contacting the most frequent users when the new version of the form is ready to use. Limited Scope and Enhanced firms will be contacted first, followed by Core and then dual-related entities.

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The FCA have long signaled that their strategy for regulating in the future will aim to combine efficient use of data and build up their workforce to be able to meet their targets and respond quickly to changes that develop out of the regulatory environment or from emerging harms.

Changes to the Connect system itself have been ongoing since 2022 with the aim to reduce manual effort and increase automation, which will benefit the user as well as enable the FCA to change processes in an “agile way to respond to changing conditions or an expanded remit.”

Firms and individuals at Senior Manager level must fill out forms to apply for authorisation. Given the number of firms the FCA supervises, this translates to a huge undertaking. In 10 months, the FCA received over 15,000 Senior Manager and Controlled Function applications alone. Forms must also be used to request changes to permission. As the industry grows, streamlining the process makes it easier for the regulator to both collect and analyse the information on these forms.

The initial testing stages saw the FCA react to feedback from firms, which has led to the simplification of language and improved accessibility. Duplicative requests for information have been removed, and some data will be prepopulated. All in all, the application process using the updated form should be less clunky than it has been in the past.

This makes sense from the FCA’s perspective too. In recent years, the regulator has struggled to stay on top of its targets. In May, they reported that the number of appointed representative applications for approved persons being processed on time was declining fairly dramatically. In Q4 2022 it was down to 82.8% of cases being processed within three months, from 94.7% in Q3 2022. Although this is likely due to a large number of applications being submitted before the applicant had the necessary permissions, removing this cause would still have seen the decisions come in below the regulator’s target.

The October 2022 Authorisations Update highlighted that the number of refusals are increasing year-on-year; the number of firms that were not authorised in 2021/22 was 1 in 5, up from 1 in 14 in the previous financial year. This trajectory is likely to continue, given the high standards expected of firms subject to the Consumer Duty.

Given the increased amount of scrutiny that the Consumer Duty brings for regulator decisions on these applications, a streamlined set of forms will work well for both applicant and regulator.

The FCA notes that “we also continue to see too many incomplete and poor-quality applications.” The overall aim with the updates is to remove unnecessary delays – incomplete applications will require contact from the regulator and additional delays. It is vital that firms understand what’s required for the application before submitting it. If the FCA refuses your application for authorisation, the application fee won’t be refunded.

We can help. Our updated Guide to the SMF Authorisation Process is completely free and supports solo-regulated firms through the process of submitting SMF applications to the FCA, including using the Connect system and breaking down the supporting information that is needed for submission alongside the application itself. One of the key elements of SMF applications is a skills gap analysis – our Skills Gap Analysis template supports this requirement. To take the uncertainty out of SMF applications, we offer a complete SMF application pack, including a training and development plan template, skills gap analysis template, fit and proper assessment template, a statement of responsibilities template, and the SMF Authorisation Guide.


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