TRW & Co · Financial services regulation
How to Get FCA Authorisation: Process and Timelines
FCA authorisation is required before a firm carries on regulated financial services activity in the UK. Firms apply through Connect, choose their permissions and prove they meet the threshold conditions. The legal deadline is six months for a complete application, but the FCA now targets four. This guide explains the process, documents, timelines and the mistakes that cause delay or refusal.
Key pointThe quickest route to FCA authorisation is not speed of submission but completeness: the statutory clock only runs from a complete application, and inconsistency between the business plan, forms and financials is a leading cause of withdrawal.
At a glance
Statutory deadline today
Section 55V FSMA requires a decision within six months of a complete application and twelve months of an incomplete one. Shorter limits require new legislation.
Faster FCA targets
Since January 2026 the FCA measures itself against four months for complete and ten months for incomplete applications, with shorter voluntary targets for some variations.
Threshold conditions apply
Firms must show effective supervision, appropriate resources, suitability and a suitable business model under Schedule 6 to FSMA and the COND sourcebook.
Senior managers approved
Individuals performing senior management functions need FCA approval. The proposed statutory limit is two months, with half of applications targeted within 35 days.
Final documents only
The FCA will not review drafts and expects the firm itself to explain its application. Controllers need criminal background checks from within six months.
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The short answer: how FCA authorisation works and how long it takes
FCA authorisation is the permission a firm needs before it carries on regulated financial services activities in the UK. You apply through the FCA's Connect system, choose the specific permissions your business model needs, and show that you meet the threshold conditions: adequate resources, suitable people, effective supervision and a viable, compliant business plan.
The statutory deadline is set by section 55V of the Financial Services and Markets Act 2000 (FSMA): the regulator must decide a complete application within six months and an incomplete one within twelve. The FCA now measures itself against shorter targets of four months for complete and ten months for incomplete applications, and the government has confirmed it will legislate to make those the statutory limits.
In practice, the timetable is driven by quality. Applications that are complete, specific and consistent move fastest. Those that are generic, missing key people or inconsistent with the business model attract questions that stop the clock or lead to withdrawal.
Do you need FCA authorisation?
FSMA's general prohibition makes it a criminal offence to carry on a regulated activity in the UK unless you are authorised or exempt. Regulated activities are listed in the Regulated Activities Order and include accepting deposits, dealing in or arranging deals in investments, managing investments, advising on investments, insurance distribution, consumer credit lending and broking, and many others.
The first step is a perimeter analysis using the FCA's Perimeter Guidance Manual (PERG). Many businesses discover that only part of what they do is regulated, or that an exclusion applies. Others find they need a different regime altogether: payments and e-money firms apply under the Payment Services Regulations 2017 or the Electronic Money Regulations 2011 rather than for FSMA permissions, as explained in our guide to EMI and payment institution licences. Cryptoasset firms are moving into FSMA under a new regime described in our article on UK cryptoasset regulation.
Alternatives to full authorisation include becoming an appointed representative of an authorised principal, which can be quicker for some intermediary models but brings dependency on the principal and limits on scope.
Choosing the right permissions
A Part 4A permission specifies the regulated activities, the investment types, the customer types and any limitations or requirements. Getting this right matters. Too narrow, and the firm will need a variation of permission before it can grow. Too broad, and the FCA will expect resources, controls and people to match, and may question why the permissions are needed.
The permissions also drive the prudential category, capital requirements, reporting and fees. An investment firm that will hold client money, for example, faces very different requirements from one that only arranges deals. The FCA's guidance on how to apply encourages firms to consider limitations or voluntary requirements, such as caps on customer numbers or restrictions on certain activities, which can make an application easier to approve and support testing a new proposition.
| Route | Legal basis | Statutory deadline | FCA target or proposal |
|---|---|---|---|
| New FSMA firm (Part 4A permission) | FSMA Part 4A | 6 months complete; 12 months incomplete | 4 months complete; 10 months incomplete (proposed statutory) |
| Variation of permission | FSMA Part 4A | 6 months complete; 12 months incomplete | 4 and 10 months; 3 and 6 months where closely aligned to the existing model (voluntary) |
| Payment or e-money institution | PSRs 2017 or EMRs 2011 | Set by those regulations | 3 months complete; 10 months incomplete (voluntary) |
| Senior manager approval | FSMA Part 5 | 3 months | 2 months (proposed statutory); at least half within 35 days |
The FCA announced these faster targets in July 2025 and began measuring performance against them from January 2026. In May 2026, HM Treasury confirmed that it will introduce primary legislation to shorten the statutory deadlines. Until that legislation is passed and in force, the section 55V deadlines remain the legal limit.
The threshold conditions
Every FCA authorisation decision turns on whether the firm meets, and will continue to meet, the threshold conditions in Schedule 6 to FSMA, explained in the FCA's COND sourcebook. For FCA-only firms they are, in summary:
- Effective supervision. The firm's structure, group and location must allow the FCA to supervise it effectively. Complex or opaque ownership is a common concern.
- Appropriate resources. Financial and non-financial resources, including capital, liquidity, people and systems, must be adequate for the business.
- Suitability. The firm, its controllers and its managers must be fit and proper, and the firm must conduct its business with integrity and due skill, care and diligence.
- Business model. The strategy must be suitable for a regulated firm, taking account of the interests of consumers and the integrity of the UK financial system.
Dual-regulated firms, such as banks and insurers, apply to the Prudential Regulation Authority, which applies its own threshold conditions alongside the FCA's.
The business plan, people and documents
The FCA expects applicants to be "ready, willing and organised". It will not review draft documents, and it expects the firm, not its advisers, to be able to explain every part of the application. The core components are:
- Regulatory business plan. The FCA publishes a sample business plan covering the business model, target customers, products, distribution, revenue, financial projections, risks, and how the firm will meet the Consumer Duty where it applies.
- Financial information. Projections, capital adequacy calculations, stress testing and evidence that funding is in place.
- Governance and controls. Organisational chart, compliance monitoring plan, risk framework, policies on conflicts of interest, complaints, financial crime and outsourcing, and a wind-down plan where relevant.
- Controllers and close links. Details of anyone with a qualifying holding, with evidence of source of funds and criminal background checks. The FCA requires individual controllers to have a criminal background check obtained no earlier than six months before applying.
- Senior managers. Applications for approval of individuals who will perform senior management functions under the Senior Managers and Certification Regime, with statements of responsibilities and a management responsibilities map where required.
The Consumer Duty is an increasingly important part of the assessment. Firms should show how product design, pricing, communications and support will deliver good outcomes, as explained in our guide to the FCA Consumer Duty. Changes to the senior managers regime are covered in our article on SMCR reform.
The FCA authorisation process step by step
- Perimeter and permissions analysis. Confirm which activities are regulated, which exclusions apply and which permissions, limitations and customer types to request.
- Pre-application engagement. Eligible firms can use the FCA's pre-application support service or, for innovative propositions, the Innovation Hub and Regulatory Sandbox.
- Build the firm. Appoint the board and key people, arrange capital, select systems and outsourcing providers, and draft policies before applying, not after.
- Prepare and submit on Connect. Complete the forms, upload final signed documents and pay the application fee. Check for consistency between the business plan, financial projections and forms.
- Case officer assessment. A case officer reviews the application, raises questions and may hold interviews with proposed senior managers. Slow or incomplete answers extend the timetable.
- Decision. The FCA grants the permission, grants it with limitations or requirements, or proposes refusal. Many weak applications are withdrawn at the FCA's suggestion before a formal refusal.
- Post-authorisation. Expect early supervisory contact, reporting obligations and scrutiny of whether the firm is operating as described in its application.
The statutory clock runs from receipt of a complete application. Answering FCA questions quickly, with documents that are already final and consistent, is the most effective way to shorten the timetable. A generic business plan copied from a template is one of the most common causes of delay.
Common reasons applications fail
The FCA publishes data on applications approved, withdrawn and refused, and its guidance highlights recurring problems. These are the issues we most often see behind failed or delayed FCA authorisation applications.
A generic or inconsistent business plan
The FCA expects the business plan to explain the firm's specific activities and how they align with the permissions sought. Plans that use generic language, describe activities not covered by the permissions, or contain financial projections that do not match the narrative raise immediate doubts about the threshold conditions. The case officer will compare the plan, the forms and the financial information line by line. Inconsistency suggests the applicant does not understand its own model, which is one of the main reasons the FCA invites withdrawal.
Key people missing or not credible
Applications fail where the compliance officer, money laundering reporting officer or other senior managers are not yet appointed, lack relevant experience, or are part-time with no clear explanation of how they will discharge their functions. Where controlled function holders are overseas, the FCA expects a clear account of how they will operate at a distance. Interviews with proposed senior managers are common, and candidates who cannot explain the firm's regulatory obligations in their own words weaken the application.
Inadequate financial resources or unclear funding
The FCA must be satisfied that the firm has enough capital and liquidity for its business and for a period of stress, and that the source of funds is legitimate. Funding that depends on future investment rounds, unclear shareholder loans or opaque offshore sources causes difficulty. Applicants should show committed funding, realistic projections and a wind-down plan explaining how the firm would exit in an orderly way without harming customers.
Non-disclosure or opaque ownership
Failing to disclose relevant information, such as past regulatory issues, disputes or criminal matters involving controllers, is treated very seriously and can lead to refusal on its own. The FCA's guidance is clear: if in doubt, disclose. Complex group structures, nominee arrangements and controllers in jurisdictions where information is hard to verify also raise effective supervision concerns. Clear ownership charts, full source of wealth evidence and candid disclosure reduce the risk.
Starting regulated activity before approval
A firm must not begin regulated activities while its application is under review unless an exemption or temporary permission applies. Doing so is a criminal offence and is likely to end the application. Marketing that amounts to a financial promotion may also breach FSMA's financial promotion restriction. Pre-launch websites, waiting lists and investor materials should be reviewed before they go live.
If the FCA proposes to refuse, it issues a warning notice, then a decision notice, and the applicant can refer the matter to the Upper Tribunal. In practice, most firms withdraw before that stage. A refusal is disclosable in future applications, so the decision whether to withdraw or contest needs careful advice.
Illustrative scenario: a wealth platform start-up
This scenario is illustrative only and does not describe any real firm.
A London start-up plans an app that lets retail customers invest in a range of funds, with a model portfolio feature and a small advice service. Its founders assume they need "an FCA licence" and begin drafting an application using a template business plan.
A perimeter review shows the picture is more complex. The platform will arrange deals in investments and safeguard and administer assets; the model portfolio feature may amount to managing investments depending on how much discretion is exercised; and the advice service requires advising permissions. Holding client money and custody assets brings client asset rules and higher capital requirements.
The founders make three decisions. First, they launch without the discretionary feature and apply only for the permissions they need on day one, with a voluntary limitation preventing them from holding client money until a later variation of permission. Second, they appoint an experienced compliance officer and MLRO before submitting, rather than promising to recruit later. Third, they rewrite the business plan so that the customer journeys, revenue model and projections match the permissions requested, and set out how the Consumer Duty will be met for a retail audience.
The narrower application is easier for the FCA to assess, and the firm can show a clear plan for growth. The trade-off is that a second application will be needed later, but that variation is likely to be quicker if the firm has a good supervisory record by then.
Overseas firms and international groups
Overseas firms serving UK clients need to establish whether their activities are carried on in the UK, whether the overseas persons exclusion applies, or whether they need a UK branch or subsidiary. The FCA expects a UK branch of an overseas firm to be subject to adequate home-state supervision and for the UK operation to be capable of effective supervision.
For groups based in Bangladesh, the Gulf, Singapore or the EU, the main questions are usually the choice between a branch and a subsidiary, the location of key decision-makers, and how group policies will be adapted to UK rules. Controllers will need to provide verifiable source of wealth evidence, which can take time to assemble from overseas. Our UK–Bangladesh team regularly assists groups with this.
What to do next: an FCA authorisation checklist
- Complete a written perimeter analysis and permission map.
- Decide between direct FCA authorisation, appointed representative status or another regime.
- Appoint and brief senior managers, compliance and MLRO before applying.
- Secure committed capital and document its source.
- Draft a specific business plan, financial projections and wind-down plan that align with each other.
- Prepare Consumer Duty, financial crime, conflicts and complaints frameworks.
- Obtain criminal background checks for controllers within the required window.
- Plan for FCA questions and interviews, and keep the team available.
- Track the government's legislation shortening statutory deadlines.
TRW & Co's London office is authorised and regulated by the Solicitors Regulation Authority. Our FCA authorisation team advises on perimeter questions, permissions, applications, variations and change in control, working with our fintech and financial services regulation teams. To discuss your FCA authorisation plans, contact us at info@trw.co.
Frequently asked questions
01How long does FCA authorisation take?
Under section 55V of FSMA, the FCA must decide a complete application within six months and an incomplete application within twelve months. Since January 2026 it has measured itself against shorter targets of four and ten months, and the government confirmed in May 2026 that it will legislate to make these statutory. Payments and e-money applications have a three-month target for complete applications. In practice the timetable depends on the quality of the application and how quickly the firm answers questions.
02What are the FCA threshold conditions?
They are the minimum standards a firm must meet to be authorised and remain authorised, set out in Schedule 6 to FSMA and explained in the FCA's COND sourcebook. For FCA-only firms, they cover effective supervision, appropriate financial and non-financial resources, suitability of the firm and its people, and a suitable business model. Dual-regulated firms such as banks and insurers must also meet PRA threshold conditions. The FCA assesses them at the application stage and on an ongoing basis after authorisation.
03Can I use a consultant to prepare my application?
Yes. Many firms use legal or compliance advisers to help with perimeter analysis, permissions, the business plan and policies. However, the FCA expects to deal directly with the firm and expects its directors and senior managers to understand and explain every part of the application. An application that the firm's own people cannot explain in interview is likely to struggle. Advisers should help the firm build its own understanding, not replace it.
04What happens if the FCA refuses my application?
If the FCA proposes to refuse, it issues a warning notice explaining its reasons and giving the firm a chance to respond. It then issues a decision notice, which the firm can refer to the Upper Tribunal. In practice, the FCA often suggests withdrawal where an application is weak, and many firms withdraw rather than face a formal refusal. A refusal must be disclosed in future applications and can affect the individuals involved, so the choice between withdrawing and contesting needs careful thought.
05Do overseas firms need FCA authorisation to serve UK clients?
It depends on whether the activity is carried on in the UK and whether an exclusion, such as the overseas persons exclusion, applies. Many overseas firms dealing with UK retail customers will need authorisation, often through a UK branch or subsidiary. The FCA expects branches to be subject to adequate home-state supervision and to be capable of effective supervision in the UK. Financial promotion rules may also apply to marketing aimed at UK customers even where no regulated activity is carried on in the UK.
06What is the difference between authorisation and a variation of permission?
Authorisation is the grant of a Part 4A permission to a firm that is not yet authorised. A variation of permission is an application by an existing authorised firm to add, remove or change the activities, investments or limitations in its permission. Both are subject to the same statutory deadlines, but the FCA has set shorter voluntary targets for variations that closely align with the firm's existing business model: three months for complete and six months for incomplete applications.
Sources and official materials
- FSMA 2000, section 55V — Statutory deadlines for determining applications
- FSMA 2000, Schedule 6: Threshold conditions — Minimum conditions for authorisation
- FCA: How to apply for authorisation — Process, expectations and tips to avoid delay
- FCA sets faster targets for authorisations — New statutory proposals and voluntary targets
- FCA Handbook: COND — FCA guidance on the threshold conditions
- FCA: Senior Managers and Certification Regime — Approval of senior managers and the regime's requirements
General information only, current as at 21 October 2026. It is not legal advice and does not create a solicitor–client relationship. It reflects the law of England and Wales unless stated otherwise; Scotland and Northern Ireland have separate legal systems, and the law changes frequently. Check current official sources and take advice on the facts of your matter.