1. Understanding FCA Authorisation
What is FCA Authorisation?
FCA authorisation is the regulatory approval required to conduct regulated financial services activities in the UK. The Financial Conduct Authority (FCA) is the primary regulator for financial services firms, responsible for ensuring firms meet appropriate standards to protect consumers and maintain market integrity.
The authorisation process is designed to ensure that only firms meeting the FCA's regulatory standards can operate in the UK financial services market. This includes demonstrating adequate resources, competent management, robust systems and controls, and appropriate business models that deliver fair outcomes for consumers.
Do You Need FCA Authorisation?
Determining whether you need FCA authorisation depends on the activities your firm intends to conduct. The FCA regulates a wide range of financial services activities, known as "regulated activities" under the Financial Services and Markets Act 2000 (FSMA).
Key Regulated Activities
Perimeter Guidance Tool
Use our free Perimeter Assessment Tool to determine whether your business activities require FCA authorisation and which specific permissions you'll need.
Try Perimeter Assessment ToolTimeline and Costs
Understanding the timeline and costs involved in FCA authorisation is crucial for business planning and resource allocation.
Typical Authorisation Timeline
Scoping business model, preparing documentation, establishing systems
Completing Connect forms, uploading documents, payment
FCA review, clarification questions, interviews
Meeting any conditions before final authorisation
Total timeline: 6-9 months from initial planning to full authorisation
With MEMA's expertise, we typically achieve authorisation in 12 weeks from submission, compared to the industry average of 20+ weeks.
Application Fees
FCA fees vary significantly depending on your permissions and sector:
| Fee Type | Amount |
|---|---|
| Standard application | £1,500 |
| Complex applications (deposit-taking) | £25,000+ |
| Variation of Permission (VOP) | £250 - £1,500 |
| Annual fees | £1,000 - £100,000+ |
FCA Fee Calculator
Calculate your exact FCA application and annual fees using our comprehensive FCA Fee Calculator.
Calculate Your FCA FeesAdditional Costs to Consider
2. Pre-Application Preparation
Business Model Scoping
Before starting your FCA application, you must clearly define your business model and how it operates within the regulatory framework. This involves:
Who are your clients? Retail, professional, or eligible counterparties?
How will you generate income? Fees, commissions, spreads, or other mechanisms?
Direct to consumer, B2B, introducers, or partnerships?
Geographic reach, product range, and service delivery model
How clients discover, onboard, transact, and are serviced
Permissions Mapping
Accurately identifying the regulated activities and permissions your firm needs is critical to a successful application. Getting this wrong leads to delays, additional costs, or operating illegally.
Key Steps in Permissions Mapping
- 1Identify all regulated activities
Review every aspect of your business against the Regulated Activities Order (RAO)
- 2Determine permission scope
Full permissions vs. limited permissions (e.g., advising vs. dealing)
- 3Specify investment types
Which instruments will you handle? (equities, bonds, derivatives, CIS, etc.)
- 4Client categorisation
Will you serve retail clients, professionals, or both?
- 5Consider future growth
Plan for permissions you'll need in 12-24 months to avoid costly VOPs later
Common Mistake
Many firms apply for too narrow permissions, requiring expensive Variation of Permission applications within months of authorisation. Work with regulatory experts to future-proof your permissions scope.
Resource Requirements
The FCA requires firms to have adequate financial and non-financial resources to conduct their business and meet regulatory obligations. This is assessed through the Threshold Conditions.
1Financial Resources
Varies by permission, typically £20,000-£730,000
Monthly or quarterly calculations based on base capital, expenditure-based, or activity-based requirements
Minimum coverage levels specified per permission type
Sufficient funds to cover 12 months of operating expenses
2Key Personnel Requirements
You'll need to identify and appoint individuals to fulfill key regulatory roles:
Overall responsibility for regulated activities
Board-level responsibility for specific areas
Compliance monitoring and regulatory reporting
AML/CTF compliance and SAR reporting
Each individual must complete an Approved Persons/Senior Managers application demonstrating they are fit and proper through qualifications, experience, and regulatory history.
SMCR Navigator
Use our SMCR Navigator tool to understand which Senior Management Functions you need and the requirements for each role.
Explore SMCR Requirements3. The Application Process
The FCA application is submitted through Connect, the FCA's online portal. The application consists of several components that must be completed accurately and comprehensively.
Connect Submission
You'll need to create a Connect account and navigate through several sections:
Legal entity details, corporate structure, ownership, and control
Specific regulated activities and investment types you're applying for
Detailed description of your business plan, revenue model, and target market
Details of all individuals performing Senior Management Functions
Three-year forecasts including P&L, balance sheet, and cash flow
Upload of required policies, procedures, and governance documentation
Required Supporting Documents
A comprehensive FCA application typically requires 50-100 pages of supporting documentation including:
Template Library
Access our comprehensive template library with ready-to-use compliance manuals, policies, and procedures tailored to your FCA permissions.
Browse Policy Templates4. Key Requirements
Threshold Conditions
The FCA's Threshold Conditions are the minimum standards that firms must meet to become authorised and remain authorised. They form the core assessment criteria for any FCA application:
UK-based mind and management, appropriate office arrangements
FCA must be able to effectively supervise your firm
Adequate financial and non-financial resources
Fit and proper management, competent staff, appropriate systems
Viable business that won't cause consumer harm
Fit and Proper
All individuals holding Senior Management Functions or Controlled Functions must demonstrate they are "fit and proper" to perform their roles. The FCA assesses three key areas:
Criminal records, regulatory sanctions, financial soundness
Qualifications, experience, knowledge of the role
Personal financial history, CCJs, bankruptcies
SYSC Requirements
The Senior Management Arrangements, Systems and Controls (SYSC) sourcebook sets out the FCA's requirements for governance, systems and controls. Key areas include:
5. Regulatory Frameworks
SMCR Implementation
The Senior Managers and Certification Regime (SMCR) applies to all FCA-authorised firms and requires:
Financial Crime
All FCA-authorised firms must have robust systems and controls to prevent financial crime:
Customer due diligence, ongoing monitoring, suspicious activity reporting
Sanctions screening, PEP identification
Internal controls, transaction monitoring, staff vetting
Policies, procedures, and staff training
Client Assets
If you hold client money or custody assets, additional CASS rules apply:
6. Post-Submission
FCA Queries
During assessment, the FCA will likely raise queries about your application. Common areas include:
Interviews
The FCA may require interviews with your proposed Senior Managers. These typically cover:
Conditional Approval
The FCA may grant authorisation subject to conditions. Common conditions include:
7. Common Pitfalls
Why Applications Fail
Insufficient capital or unrealistic financial projections
Unclear responsibilities, inadequate oversight structures
Policies that don't reflect actual business operations
Issues with key personnel's history or competence
Unrealistic assumptions or unsustainable economics
Red Flags
The FCA looks closely at applications that show:
How to Avoid Delays
8. Sector-Specific Guidance
Payments
Payment services firms face additional requirements under the Payment Services Regulations 2017:
Investments
Investment firms must comply with MiFID requirements:
Consumer Credit
Consumer credit firms have specific obligations under CONC: