Applications for authorisation by the FCA are approved if the relevant applicants have satisfied a number of threshold conditions set by the FCA.
Adequate Financial Resources
They look at the amount of capital a firm has in relation to its outstanding liabilities to check that the firm will be able to continue to operate without becoming insolvent soon after.
Fit and Proper Key Individuals
Senior management will be checked to ensure that all Directors, partners and others in senior management roles are honest, competent and of good financial standing. Any undisclosed county court judgements or any lack of relevant experience will prevent approval of your application.
Sound Systems and Controls
These are documented processes that enable a firm to manage risk, handle client money and deal with staff misconduct. They are frequently poorly developed controls that give rise to delays and refusals of authorization applications.
A Lawful Business Model
This means the business model of the applicants for FCA authorisation needs to be lawful and within the regulated perimeter that the activity of the firm intends to carry out will be in.
Governance and Compliance Arrangements
Accountability and the named Compliance Function are essential and will vary from the largest organisation to the smallest single proprietorship. The FCA require organisations of all sizes to have these in place and Guidance is available at www.adempi.co.uk/fca-authorisation in respect of FCA Authorisation and on the FCA’s own website in respect of the FCA’s authorisation threshold conditions, which are set out in full statutory detail.
Consumer and Market Protection
Last of all, the FCA looks at whether approval of your firm would pose a risk to customers or the wider market. There must be in place a process for dealing with complaints and this can be demonstrated by showing how your firm treats its customers in the best way possible.
By ensuring each of these conditions are met before submitting your application for authorization, your application is likely to be approved quickly and efficiently.
