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Here to help with Regulation and Compliance
Getting Authorised
Why and How
Getting Authorised in the UK
Financial services business in the UK is heavily regulated. Firms engaging in the business are subject to a large number of rules and regulations covering things like how they treat their customers, how they conduct their own affairs, and how much capital they should hold. But you may have seen that firms usually describe themselves as ‘authorised and regulated’. That’s because apart from all these regulations, it is illegal to engage in financial services business in the UK without permission from the appropriate regulator. This may be the PRA but in most cases it will be the FCA.
The application process starts with the completion of a number of forms and the provision of certain supporting documentation. And the payment of a fee.
Your application will be assigned to a case officer who will review your forms and any additional information you have provided. The case officer will then normally contact you requesting clarification on any points they think relevant.
The case officer will ultimately produce a paper which will be submitted to a ‘decision maker’. And the decision maker will decide whether or not you should be given permission to carry on regulated activities.
The decision hinges on two basic considerations.
First, is the regulator satisfied that you are fit and proper to carry on investment business? This is about whether you are capable and trustworthy. But note that the regulator must be satisfied that you are. The burden of proof is on you. If the regulator has any doubts then it is for you to allay those doubts.
The other key test is that the regulator must be satisfied that you are ready, willing and able to conduct the business you propose in accordance with all applicable rules and regulations.
That second point may sound simple because I’ve condensed it into a single sentence. But it captures a lot of considerations.
Ready means that you need to be in a position to commence business. This means that you must have everything in place including systems, staff and capital to commence business the day after you are authorised.
Compliance with all applicable rules and regulations requires you to have sufficient knowledge of the rules applicable to the business and to have designed your business accordingly.
These , then, will be the factors that your case officer is trying to assess.
To do it, they will look at your business plan, they will look at your ICAAP and your financial projections, they will look at your compliance manual and your compliance monitoring programme and a number of things besides. And they will seek to assess whether you understand the regulatory requirements applicable to your business and whether you will be able to comply with them.
If you’d like to know more about whether your business needs to be authorised, the application process, or how we can assist you through it, please feel free to contact us. We’re here to help.
