Get FCA authorisation for financial services

If your business involves regulated financial activities - such as advising on investments, providing consumer credit, or accepting deposits - you need authorisation from the Financial Conduct Authority (FCA) before you can operate.

The authorisation process is rigorous and typically takes 6-12 months. You'll need to demonstrate that you meet the FCA's threshold conditions for authorisation, including having adequate financial resources and suitable people in charge.

FCA authorisation overview

Financial Conduct Authority authorisation requirements

The Financial Services and Markets Act 2000 (FSMA) makes it illegal to carry on regulated activities in the UK without FCA authorisation (or an exemption).

The general prohibition means that if your business activities are regulated, you must be authorised by the FCA before you can lawfully operate.

Key requirements for authorisation:

Threshold conditions - minimum standards for authorisation
Approved persons - senior managers must be FCA-approved
Capital requirements - minimum financial resources
Business plan - demonstrating viable, compliant business model
Systems and controls - governance, risk management, compliance

Penalty for operating without authorisation: Up to 2 years imprisonment and/or unlimited fine.

Do you need FCA authorisation?

Not all financial activities require authorisation. You need to check whether your specific activities fall within the 'regulatory perimeter'. The FCA's Perimeter Guidance (PERG) helps determine this.

Some businesses can operate without full authorisation:

Appointed representatives: Act on behalf of an authorised firm
Exempt persons: Certain activities by local authorities, professional firms
Limited permission: Smaller consumer credit activities

If in doubt, seek legal advice - operating without required authorisation is a criminal offence.

Regulated activities

The following activities require FCA authorisation:

FCA Regulated Activities

Activities that require FCA authorisation in the UK

The following activities require FCA authorisation when conducted in the UK:

Accepting deposits - Banks, building societies (RAO Article 5)
Dealing in investments as principal - Trading securities (Article 14)
Dealing in investments as agent - Broker services (Article 21)
Arranging deals in investments - Introducing clients, arranging transactions (Article 25)
Managing investments - Discretionary portfolio management (Article 37)
Safeguarding and administering investments - Custody services (Article 40)
Advising on investments - Investment advice (Article 53)
Mortgage lending and administration - Regulated mortgages (Articles 61(1), 61(2))
Mortgage advice - Advising on regulated mortgage contracts (Article 53A)
Insurance distribution - Selling/advising on insurance (Article 21A)
Consumer credit - Lending, credit broking, debt collection
Payment services - Payment initiation, account information (Article 9C)
Electronic money issuance - Issuing e-money (Article 9B)

Conducting regulated activities without authorisation is a criminal offence under FSMA 2000 s.23.

FCA Regulated Activities Requiring Authorisation

Activities under the Financial Services and Markets Act 2000 (Regulated Activities Order 2001) that require FCA authorisation.

Operating any of these activities without FCA authorisation is a criminal offence under Section 19 FSMA, punishable by up to 2 years imprisonment and unlimited fines.

Accepting deposits: Article 5 RAO - Only regulated activity applying to deposits
Dealing in investments as principal: Article 14 RAO - Trading own account
Dealing in investments as agent: Article 21 RAO - Trading on behalf of clients
Arranging (bringing about) deals in investments: Article 25(1) RAO - Facilitating transactions
Making arrangements with a view to transactions: Article 25(2) RAO - Preparatory arrangements
Advising on investments: Article 53(1) RAO - Excludes P2P agreements and deposits
Safeguarding and administering investments: Article 40 RAO - Custody services
Sending dematerialised instructions: Electronic settlement instructions
Legislative source: Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/544)

FSMA 2000 Regulated Activities

Activities requiring FCA authorisation under Section 22 FSMA 2000 and the Regulated Activities Order 2001.

Under Section 19 of FSMA 2000 (the General Prohibition), no person may carry on a regulated activity in the UK unless they are an authorised person or an exempt person. Contravening this prohibition is a criminal offence under Section 23.

Core financial activities: Accepting deposits, issuing electronic money, effecting/carrying out insurance contracts
Investment activities: Dealing as principal, dealing as agent, arranging deals, managing investments
Safeguarding activities: Safeguarding and administering investments (custody services)
Advisory activities: Advising on investments, advising on regulated mortgage contracts
Mortgage activities: Entering into, administering, and arranging regulated mortgage contracts
Credit activities: Credit broking, debt adjusting, debt counselling, debt collecting, debt administration
Payment activities: Providing payment services, operating electronic lending systems (P2P)
Specialist activities: Operating collective investment schemes, establishing pension schemes, claims management
Cryptoasset activities: Cryptoasset exchange provider, custodian wallet provider
Penalty for breach (on indictment): Up to 2 years imprisonment and/or unlimited fine
Penalty for breach (summary): Up to 6 months imprisonment and/or statutory maximum fine

FCA Authorisation Requirements

Key requirements for obtaining FCA authorisation

Application portal: FCA Connect (connect.fca.org.uk)
Required documentation: Business plan, 3-year financial projections, capital adequacy assessment
Senior Manager requirements: Form A submission with Statements of Responsibilities, 6-year regulatory references, criminal records checks
Systems documentation: Compliance arrangements (MLRO, oversight, complaints), IT systems, cyber security, business continuity
Controller disclosure: Details of individuals/entities with 10%+ shareholding or voting rights
Application fee: £1,500 (standard) or £5,000 (complex) plus £250 per Senior Manager
Timeline: 6-12 months (multiple assessment rounds)
Outcome: Approval gives Firm Reference Number (FRN)

Application and annual fees

FCA Authorisation Application Fees

Current fees for FCA authorisation applications

Standard application fee: £1,500
Complex application fee: £5,000 (consumer credit, EMI)
Limited permission fee: £500
Senior Manager approval fee: £250 per person
Variation of permission fee: £250-£1,500
Annual periodic fee (minimum): From £2,000 (2024/25)

FCA Authorisation Application Fee Categories

Current fee categories for FCA authorisation applications by complexity tier.

Category 1: £280
Category 2: £550
Category 3: £1,120
Category 4: £2,790
Category 5: £5,580
Category 6: £11,150
Category 7: £27,870
Category 8: £55,740
Category 9: £111,470
Category 10: £222,940
Small Payment Institution: £1,120 (Category 3)
Authorised Payment Institution (basic): £2,790 (Category 4)
Authorised Payment Institution (complex): £5,580 (Category 5)
Small E-Money Institution: £1,120 (Category 3)
Authorised E-Money Institution: £5,580 (Category 5)
Consumer credit (limited permission): £550 (Category 2)
Consumer credit (full permission, basic): £1,120 (Category 3)
Cryptoasset registration: £11,150 (Category 6)
Additional fee block: 50% of relevant authorisation application fee
Permission change within existing fee block: £550 (Category 2)
Permission reduction: Free
Payment method: Credit or debit card via FCA Connect
Refund policy: Non-refundable; fee forfeited if withdrawn or refused

Total cost of authorisation: Beyond the application fee, budget for:

Legal advice on application (often £10,000-£50,000+)
Compliance consultancy
IT systems meeting FCA requirements
Professional indemnity insurance
Capital requirements

The annual periodic fee varies by firm size and activities - check the FCA Fees Calculator.

Capital requirements

You must have and maintain adequate financial resources:

Consumer Duty

Since July 2023, FCA-authorised firms must comply with the Consumer Duty - the FCA's flagship conduct standard:

FCA Consumer Duty requirements

Consumer Duty obligations from July 2023

The Consumer Duty (from 31 July 2023) requires firms to deliver good outcomes for retail customers.

The Consumer Principle: A firm must act to deliver good outcomes for retail customers.

Four outcomes:

Products and services - designed to meet needs of target market
Price and value - fair price that provides fair value
Consumer understanding - communications help customers understand
Consumer support - support enables customers to realise benefits

Cross-cutting rules: Act in good faith, avoid foreseeable harm, enable and support customers.

New and existing products: From 31 July 2023
Closed products: From 31 July 2024

TECHNOLOGY & DIGITAL Requirement

Fintech firms using embedded finance, Banking-as-a-Service (BaaS), or partnering with regulated entities must ensure regulatory responsibilities are clearly defined. Outsourcing regulated activities doesn't remove your regulatory obligations - you remain accountable to the FCA.

If you're building payment infrastructure or handling customer funds, clarify whether you need full FCA authorisation or can operate under an agent/distributor model with a principal firm that holds the permissions.

Who this applies to: Fintech platforms using white-label financial services or embedded finance APIs

Senior Managers and Certification Regime

Authorised firms must comply with individual accountability requirements:

Senior Managers and Certification Regime (SMCR)

Individual accountability requirements

The Senior Managers and Certification Regime (SM&CR) promotes individual accountability in financial services.

Three elements:

Senior Managers Regime - senior managers need FCA approval
Certification Regime - firms certify staff in key roles annually
Conduct Rules - rules of conduct for all relevant staff

Key Senior Management Functions:

SMF1 - Chief Executive
SMF3 - Executive Director
SMF16 - Compliance Oversight
SMF17 - Money Laundering Reporting
SMF29 - Limited Scope (smaller firms)

Certification renewal: Annual
Conduct rules training: At induction and regularly

Senior Managers & Certification Regime (SM&CR)

Individual accountability requirements for FCA-regulated firms

Core Senior Management Functions (all firms)

SMF1 - Chief Executive: Executive responsibility for conduct of firm
SMF16 - Compliance Oversight: Responsibility for regulatory compliance
SMF17 - Money Laundering Reporting Officer: AML compliance responsibility

Enhanced SMFs (core investment firms, banks, insurers)

SMF2 - Chief Finance Officer
SMF3 - Executive Director
SMF9 - Chair of Governing Body
SMF10-14 - Risk and control functions

Application requirements

Form A application to FCA (£250 per person)
Statement of Responsibilities (SoR)
Regulatory references (6 years)
Criminal records check
Fit and proper assessment

Certification Staff

Annual certification required for customer-facing roles and material risk takers.

Conduct Rules

Individual Conduct Rules apply to all staff. Senior Manager Conduct Rules apply to SMFs.

Senior Managers and Certification Regime (SM&CR) Requirements

Individual accountability requirements for FCA-regulated firms under the Senior Managers and Certification Regime.

The Senior Managers and Certification Regime (SM&CR) establishes individual accountability in financial services. Senior Management Functions (SMFs) require FCA pre-approval. The regime has three pillars: Senior Managers Regime, Certification Regime, and Conduct Rules.

SMF16 - Compliance Oversight: Required for all firms - responsible for compliance function and reports to governing body
SMF17 - Money Laundering Reporting Officer: Required for all firms - oversees AML/CTF compliance
SMF1 - Chief Executive Officer: Most senior executive responsible for overall management
SMF2 - Chief Finance Officer: Oversees firm's financial resources (enhanced firms)
SMF3 - Executive Director: Director other than non-executive director
SMF9 - Chair of Governing Body: Chairs and oversees governing body performance
SMF27 - Partner: Partner in LLP or partnership
SMF29 - Limited Scope Function: For limited scope firms only
Form A submission: Required for all SMF appointments
Statement of Responsibilities: Required document showing SMF accountabilities
Regulatory references: 6 years of references required
Criminal records check validity: 6 months (extended from 3 months in 2025 reforms)
Certification requirement: Annual certification that staff are fit and proper
Certification functions: CASS oversight, proprietary trader, significant management, material risk taker, client-dealing
Senior Manager breach reporting: Within 7 business days to FCA
Certification staff breach reporting: Annually in October (unless serious - report immediately)

FCA Individual Conduct Rules

Minimum standards of individual behaviour under SM&CR for all staff at FCA-regulated firms.

The Conduct Rules apply to all staff at FCA-regulated firms except ancillary staff (receptionists, security, cleaners, IT support). Senior Managers are subject to additional Senior Manager Conduct Rules.

Individual Conduct Rule 1: You must act with integrity
Individual Conduct Rule 2: You must act with due skill, care and diligence
Individual Conduct Rule 3: You must be open and cooperative with the FCA, PRA and other regulators
Individual Conduct Rule 4: You must pay due regard to the interests of customers and treat them fairly
Individual Conduct Rule 5: You must observe proper standards of market conduct
Individual Conduct Rule 6: You must act to deliver good outcomes for retail customers (Consumer Duty alignment)
Senior Manager Conduct Rule SC1: Take reasonable steps to ensure business is controlled effectively
Senior Manager Conduct Rule SC2: Take reasonable steps to ensure compliance with regulatory requirements
Senior Manager Conduct Rule SC3: Take reasonable steps to ensure appropriate delegation and oversight
Senior Manager Conduct Rule SC4: Disclose appropriately any information the FCA or PRA would expect notice of
Applies to: Senior Managers, Certification staff, most other employees
Excludes: Ancillary staff (receptionists, security, cleaners, IT support)

Anti-money laundering requirements

All regulated financial services firms must have robust AML controls:

Anti-money laundering requirements

MLR 2017 obligations for financial services

The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 (MLR 2017) require:

Risk assessment - assess your business's ML/TF risks
MLRO appointment - designate a Money Laundering Reporting Officer
Customer due diligence (CDD) - verify customer identity
Enhanced due diligence - for higher-risk customers
Ongoing monitoring - monitor transactions and relationships
Suspicious activity reports (SARs) - report suspicious activity to NCA
Record keeping - retain CDD records for 5 years after relationship ends
Staff training - initial and ongoing AML training

Record retention: 5 years from end of business relationship
SAR deadline: As soon as practicable after suspicion formed

How to apply for authorisation

FCA authorisation procedure

Steps to become FCA authorised

Determine if authorisation required – Check if your activities are regulated under FSMA. Use FCA Perimeter Guidance (PERG) and consider getting legal advice for complex cases.
Prepare business plan – Develop 3-year financial projections, regulatory business plan showing how you'll meet FCA requirements, and governance structure.
Identify key individuals – Determine who will hold Senior Management Functions. They will need individual FCA approval and must meet fit and proper requirements.
Secure capital resources – Ensure you have or can demonstrate access to required minimum capital for your activities.
Develop compliance infrastructure – Establish policies, procedures, systems and controls for compliance, AML, complaints handling, and data protection.
Submit application via FCA Connect – Complete all application forms, upload supporting documents, and pay application fee.
Respond to FCA questions – FCA case officer will review application and likely request additional information. Respond promptly and thoroughly.
Receive decision – FCA will authorise (possibly with conditions), authorise with requirements, or refuse. Process typically takes 6-12 months.

FCA Authorisation Application Process

Procedure for applying for FCA authorisation under FSMA 2000 - used across multiple financial services guides.

The FCA requires applicants to be Ready, Willing, and Organised before submitting an application via FCA Connect. Applications must include final versions of all documents - the FCA will not review drafts.

Determine if authorisation is required – Review the Regulated Activities Order 2001 and FCA Perimeter Guidance Manual (PERG) to confirm your activities require authorisation. Some activities may be exempt or excluded.
Assess threshold conditions – Ensure you can meet the five threshold conditions: appropriate legal status, UK location of offices, capability for effective FCA supervision, appropriate resources, and suitability (fit and proper).
Prepare required documentation – Compile business plan, 3-year financial projections, capital adequacy assessment, compliance arrangements, and IT/cyber security documentation.
Identify Senior Managers – Determine who will hold Senior Management Functions (SMFs). Minimum required: SMF16 (Compliance Oversight) and SMF17 (MLRO). Prepare Form A applications and Statements of Responsibilities.
Obtain criminal background checks – Individual controllers must obtain DBS checks no earlier than 6 months before application submission. Standard DBS for most; Basic DBS for sole directors.
Submit application via FCA Connect – Create FCA Connect account and submit complete application with all documentation and applicable fees.
Respond to FCA queries – The FCA will conduct multiple assessment rounds. Respond promptly to all information requests and make staff available for meetings if requested.
Receive authorisation decision – Upon approval, receive Firm Reference Number (FRN) and access to FCA regulatory systems. Firm added to Financial Services Register.

Application portal: FCA Connect (connect.fca.org.uk)
Complete FSMA application timeline: Up to 6 months
Incomplete FSMA application timeline: Up to 12 months
Payment/e-money application timeline: Up to 3 months
Application fee range: £280 (Category 1) to £222,940 (Category 10)
Common fees - Standard (Category 2): £550
Common fees - Consumer credit basic: £1,120 (Category 3)
Common fees - Complex authorisation: £5,580 (Category 5)
Cryptoasset registration fee: £11,150 (Category 6)

FCA Threshold Conditions for Authorisation

The five statutory conditions that must be met for FCA authorisation under Schedule 6 of FSMA 2000, with detailed requirements for each condition.

Schedule 6 of FSMA 2000 sets out the minimum conditions that all applicants must meet to become authorised. The FCA must be satisfied that these conditions are met at authorisation and on an ongoing basis. The threshold conditions act as a gateway - failure to meet any condition results in refusal of authorisation.

Condition 1: Legal status (Paragraph 2B): Appropriate legal form - body corporate, partnership, or individual as required for the regulated activities sought
Legal status examples: Deposit-taking requires body corporate; insurance requires body corporate or registered friendly society
Condition 2: Location of offices (Paragraph 2C): Head office (and, if UK-incorporated, registered office) must be in the United Kingdom
Mind and management test: Business decisions must be taken in the UK - not just brass plate presence
Condition 3: Effective supervision (Paragraph 2D): FCA must be capable of effectively supervising the firm, considering structure, activities, and group connections
Effective supervision factors: Group complexity, overseas parents, outsourcing, nature of client relationships, geographic spread
Condition 4: Appropriate resources (Paragraph 2E): Adequate financial resources (regulatory capital), non-financial resources (systems, controls, competent staff), and access to resources when needed
Resources assessment: 3-year financial projections, capital adequacy calculations, systems and controls, business continuity
Condition 5: Suitability (Paragraph 2F): Fit and proper to be authorised - competence, honesty, integrity of firm and controllers
Suitability assessment areas: Conduct history, convictions, regulatory sanctions, business model viability, governance arrangements
Ongoing requirement: Conditions must be met continuously, not just at authorisation
FCA power on failure: Section 55J - vary or cancel permissions if threshold conditions cease to be satisfied
Interim permissions: Not available - must fully satisfy all conditions before authorisation granted

Assessment approach: The FCA applies a judgement-based approach. For Effective Supervision (Condition 3), complex group structures with overseas parents receive enhanced scrutiny. For Resources (Condition 4), projections must show ability to meet capital requirements through the forecast period and under stressed scenarios. For Suitability (Condition 5), controllers and senior managers undergo background checks including criminal records, regulatory references, and credit checks.

Common rejection reasons:

Insufficient capital or unrealistic financial projections
Inadequate compliance arrangements or systems
Questions over fit and proper status of controllers
Group structure preventing effective FCA supervision
Business model that does not demonstrate understanding of risks

FCA Threshold Conditions (COND)

FCA Authorisation Exemptions

Routes to carry on regulated activities without full FCA authorisation under FSMA 2000.

FSMA 2000 provides several exemptions from the general prohibition on carrying on regulated activities without authorisation. The main routes are Appointed Representative status (Section 39), Exempt Professional Firms (Section 327), and statutory exemptions.

Appointed Representative (Section 39): Carry on activities under written contract with FCA-authorised principal firm
AR notification requirement: Principal must notify FCA at least 30 days before appointment
AR update requirement: Principal must update FCA of changes within 10 business days
AR reporting: Annual REP025 complaints and revenue data
Introducer AR: Simplified AR limited to introductions and distributing financial promotions
Exempt Professional Firm (Section 327): Members of designated professional bodies carrying on incidental regulated activities
Designated professional bodies: Law Society, ICAEW, ICAS, ACCA, Institute of Actuaries, and equivalents
Part XX condition: Regulated activity must be incidental to professional services
Statutory exemptions: Bank of England, international financial institutions, UK Infrastructure Bank
Exempt from accepting deposits: Municipal banks, credit unions, school banks, certain charities
Instalment credit exemption: Repayable in no more than 12 instalments within 12 months, no interest or charges
Local authority exemption: Making loans without fees or charges under statutory provisions

Expected timelines

Understanding the authorisation timeline helps you plan your business launch:

FCA online services

The FCA provides online systems for applications and ongoing compliance:

Enforcement and penalties

The FCA has extensive enforcement powers:

FCA enforcement powers

Regulatory action and penalties

Own-initiative variation: FCA can vary permissions without consent
Financial penalty: Unlimited, based on severity and firm revenue
Public censure: Published statement of misconduct
Restitution orders: Compensation to customers
Injunctions: Court orders to stop activity
Criminal prosecution: For carrying on without authorisation
Withdrawal of authorisation: Removal from FCA Register

Common questions

How long does authorisation take? Typically 6-12 months from complete application. Complex applications can take longer. The FCA has no statutory deadline.

Can I start trading while applying? No. You must not carry on regulated activities until you receive authorisation. Operating without authorisation is a criminal offence.

What if I need to act quickly? Consider becoming an appointed representative of an existing authorised firm while your own application is processed.

Do I need FCA authorisation for payment services? Yes, payment services require either FCA registration (small PI) or authorisation (authorised PI). E-money issuance requires e-money authorisation.

Business Context Testing

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Guvnor

Get FCA authorisation for financial services

Do you need FCA authorisation?

Regulated activities

Application and annual fees

Capital requirements

Consumer Duty

Technology & Digital businesses only

Senior Managers and Certification Regime

Anti-money laundering requirements

How to apply for authorisation

Expected timelines

FCA online services

Enforcement and penalties

Common questions

Compliance Assistant

🧪 Business Context Testing

◉ Content Graph

Do you need FCA authorisation?

Regulated activities

Application and annual fees

Capital requirements

Consumer Duty

Technology & Digital businesses only

Senior Managers and Certification Regime

Anti-money laundering requirements

How to apply for authorisation

Expected timelines

FCA online services

Enforcement and penalties

Common questions

Related guides in Professional Services

Business Context Testing

Content Graph