Guide
Apply for FCA authorisation under Part 4A FSMA
How to apply to the Financial Conduct Authority for permission to carry on regulated activities under Part 4A of the Financial Services and Markets Act 2000. Covers scoping permissions, preparing the regulatory business plan, Senior Managers approvals, the Connect submission, fees, and the statutory determination clock.
When you must apply for FCA authorisation
If your business carries on a regulated activity in the United Kingdom by way of business, you must be authorised by the Financial Conduct Authority (FCA) before you start, unless you are exempt. Regulated activities are defined in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/544) and include accepting deposits, dealing in investments, arranging deals, advising on investments, managing investments, operating a payment service, consumer credit lending, insurance distribution and many others.
This is the general prohibition in section 19 of the Financial Services and Markets Act 2000 (FSMA). Trading without authorisation is a criminal offence under section 23 FSMA, punishable on indictment by up to two years imprisonment, an unlimited fine, or both. Agreements made in breach of the general prohibition are unenforceable against the customer under section 26 FSMA.
This guide takes you through a Part 4A FSMA application step by step. Before you start, read the threshold conditions reference guide: the FCA must be satisfied that you meet, and will continue to meet, those conditions before it grants permission.
Trading before authorisation is a criminal offence
Dual regulation route ā banks, building societies, insurers and major investment firms
If you intend to accept deposits, effect or carry out contracts of insurance, or act as a designated investment firm, you fall within the Financial Services and Markets Act 2000 (PRA-regulated Activities) Order 2013 (SI 2013/556). You must apply to both the Prudential Regulation Authority (PRA) and the FCA. The PRA leads on prudential matters and is responsible for granting permission, while the FCA must consent before permission is given. Use the joint PRA / FCA new firm authorisation pack and expect parallel case teams. The 6-month statutory clock under section 55V FSMA still applies, but the practical timeline is usually longer because of dual scrutiny.
Step-by-step: the Part 4A application
The FCA expects a complete, well-evidenced application. Incomplete submissions are returned and restart the clock. Work through the steps below in order; each later step depends on the work done in earlier ones.
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1. Scope your permission
Identify each regulated activity you will carry on, the investment types or customer types involved, and any limitations or requirements you accept (for example, no holding of client money, retail clients only, or a financial promotions limitation). Use the FCA Handbook PERG sourcebook to confirm whether each activity is regulated and whether any exclusions apply. Your draft Scope of Permission feeds every later step ā get it wrong and you will need to vary your permission later under section 55H FSMA, which adds time and fees.
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2. Prepare your regulatory business plan
Write a regulatory business plan that explains your business model, target customers, distribution channels, fee structure, and how you will treat customers fairly. The plan must show how you meet each threshold condition in Schedule 6 FSMA. Include a three-year financial projection with profit and loss, balance sheet and cash flow, plus a capital adequacy calculation showing you meet the prudential floor for your activity. The FCA reads this document first; weakness here delays everything else.
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3. Build your governance map and identify Senior Managers
Map your governance: who chairs the board, who runs each business line, who is the compliance officer, who is the money laundering reporting officer (MLRO), and who holds the other Senior Management Functions (SMFs) prescribed for your firm category under the Senior Managers and Certification Regime. Each SMF candidate needs a Statement of Responsibilities and a completed Form A (long form) covering fitness and propriety, qualifications, previous regulatory history and financial soundness. Submit Form A approvals alongside the firm application ā the FCA will not authorise a firm that has no approved Senior Managers in place.
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4. Complete the Connect application
Register your firm on the FCA Connect portal at <a href="https://connect.fca.org.uk/">connect.fca.org.uk</a> and complete the new firm authorisation application. Connect walks you through the relevant question set for your permission profile and lets you upload the regulatory business plan, financial projections, governance map, compliance monitoring programme, recovery and wind-down plan, and Form A submissions for each Senior Manager. Validate every section before submission ā Connect will not let you submit a partially completed form and the FCA case officer will return any submission that is missing mandatory attachments.
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5. Pay the application fee
Pay the application fee at submission. The fee is set by FCA Handbook FEES 3 Annex 1R and is banded by complexity: Straightforward (for example, simple consumer credit broking), Moderately Complex (for example, investment intermediation, insurance intermediation, mortgage intermediation) and Complex (for example, investment management, MiFID investment firms, payment institutions, e-money institutions). Check the current fee in FEES 3 Annex 1R on the FCA Handbook before you submit; the fee is non-refundable, including if your application is refused or withdrawn.
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6. Respond to case-officer queries
Once your application is allocated, an FCA case officer will contact you. Expect detailed challenge on your business model, financial projections, controls and governance. Reply promptly and in full ā the clock under section 55V FSMA pauses while the FCA waits for further information you have been asked to supply. Many applications are determined on the strength of how the firm answers these queries, not on the original submission alone. Keep an audit trail of every exchange.
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7. Track the statutory determination clock
Section 55V FSMA gives the FCA <strong>six months</strong> to determine a complete application, extended to <strong>twelve months</strong> for an incomplete application. The clock starts when the FCA receives your application and stops only on a formal request for further information. If the FCA proposes to refuse, you receive a Warning Notice under section 55X FSMA and can make representations to the Regulatory Decisions Committee before a Decision Notice is issued. If granted, you receive a Scope of Permission Notice and can begin regulated business from the effective date stated.</p>
How the threshold conditions are tested
The threshold conditions are the substantive standard the FCA applies to every application. They cover legal status, location of offices, effective supervision, appropriate non-financial and financial resources, suitability, and business model. Read the threshold conditions reference guide for a full breakdown of each test and the evidence the FCA expects.
Common reasons for delay or refusal
- Vague scope of permission ā listing activities you do not need increases scrutiny and fee complexity.
- Weak financial projections ā the FCA tests your numbers against your stated business model. Inconsistencies between the plan and the projections are flagged immediately.
- Senior Manager gaps ā missing or unfit SMF candidates stop the application until resolved.
- No recovery and wind-down plan ā the FCA expects to see how customers and client money would be protected if the firm failed.
- Undisclosed regulatory history ā Form A asks for prior regulatory matters in any jurisdiction. Non-disclosure is treated as evidence of lack of integrity.
Book a pre-application meeting with the FCA before you submit if your business model is novel, you are seeking a complex permission, or you are a dual-regulated firm. The pre-application route is free, surfaces issues early, and reduces the risk of returned submissions.
What happens after authorisation
Authorisation is the start, not the end. From day one you must comply with the FCA Handbook in full, including the Principles for Businesses, the relevant sourcebook for your activity (for example, COBS, MCOB, ICOBS, CASS, CONC), the SYSC governance rules, and the SMCR conduct rules. You must also pay the annual periodic fee, submit regulatory returns through RegData, notify the FCA of material changes under Principle 11, and keep your Scope of Permission Notice up to date by applying for a Variation of Permission whenever your activities change.