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Financial services regulation and FCA authorisation

Regulatory requirements for financial services businesses.

UK-wide
Guide summary

Check if your business needs FCA authorisation to provide financial services in the UK. If you do, apply online via FCA Connect. Without authorisation, you could face criminal charges.

  • Check if your activities are regulated by the FCA
  • Apply via FCA Connect if you need authorisation
  • Process takes 6-12 months to complete
  • Application fee starts at £1,500
  • Annual fees range from £1,000 to £250,000+
  • Budget £10,000-£50,000+ for legal and compliance costs
  • Consider the Appointed Representative route for lower costs
  • Carrying out regulated activities without authorisation is a crime
  • No size threshold - authorisation depends on activity
  • Principal firms take full liability for Appointed Representatives
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UK-wide

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If you plan to provide financial services in the UK, you may need authorisation from the Financial Conduct Authority (FCA). This is not a choice - carrying out regulated activities without authorisation is a criminal offence.

What is a regulated activity?

The Financial Services and Markets Act 2000 (FSMA) defines regulated activities. Common examples include:

  • Accepting deposits
  • Dealing in investments
  • Arranging deals in investments
  • Managing investments
  • Advising on investments
  • Insurance intermediation
  • Consumer credit activities
  • Operating a multilateral trading facility

Do I need authorisation?

You need FCA authorisation if you:

  • Carry out a regulated activity
  • By way of business (not one-off or personal transactions)
  • In the UK

There is no size threshold. Authorisation depends on the activity you do, not your turnover or number of employees.

Professional & Financial Services Requirement

FCA authorisation is a criminal offence requirement

It is a criminal offence to carry out a 'regulated activity' by way of business in the UK without Financial Conduct Authority (FCA) authorisation or an exemption.

Regulated activities include:

  • Accepting deposits (banking)
  • Dealing in investments (buying/selling securities)
  • Arranging deals in investments (brokerage)
  • Managing investments (discretionary portfolio management)
  • Advising on investments (financial advice)
  • Insurance intermediation (insurance brokers, agents)
  • Consumer credit (lending, hire purchase, credit brokerage)
  • Payment services (PSRs apply)

Exemptions: Some activities have limited exemptions (e.g., appointed representatives, overseas persons exclusion, professional firms exemption for incidental regulated activity).

Who this applies to: Any business carrying out regulated activities in the UK, regardless of size. No turnover or employee threshold - authorisation is activity-based.
Enforcement: Unlimited fines and up to 2 years imprisonment for carrying out regulated activities without authorisation. FCA can issue prohibition orders, preventing individuals from working in financial services. Contracts entered into by unauthorised firms may be unenforceable.
FCA authorisation guidance (opens in a new tab)

How to apply for FCA authorisation

The authorisation process typically takes 6-12 months and includes:

  1. Determine if you need authorisation - Use FCA's 'Connect' service to check
  2. Prepare your application - Business plan, financial projections, compliance arrangements, key person approvals
  3. Submit application via FCA Connect - Online portal with supporting documents
  4. FCA assessment - Threshold conditions assessment (adequate resources, suitability, business model)
  5. Approval and ongoing supervision - Annual fees, regulatory returns, compliance monitoring

Costs

Authorisation costs vary by firm type:

  • Application fee: £1,500 for most firms (higher for banks/insurers)
  • Annual fees: £1,000-£250,000+ depending on activity and size
  • External costs: Budget £10,000-£50,000+ for legal, compliance, and consulting advice

Appointed Representative (AR) route

An alternative to direct authorisation is becoming an Appointed Representative of an authorised firm (the 'principal').

  • Advantages: Faster market entry, lower cost, principal handles regulatory compliance
  • Disadvantages: Principal has full liability for your actions, limited control, principal takes % of revenue
  • Common in: Financial advice, insurance broking, mortgage intermediation