Making a Direct FCA Application with Khepri
The Financial Conduct Authority (“FCA”) is the body that is responsible for approving new applicants and then supervising them on an ongoing basis.
The activities that trigger a requirement to seek authorisation from the FCA are set out in the UK’s Regulated Activities Order. We can help you evaluate whether permission is required and, if you wish for a legal opinion, we can introduce you to suitably qualified law firms.
Types of applications we support
We want to focus on what we do best and therefore we support the following types of licence applications:
Fund management (all asset classes)
Investment advisers
Fintech
Corporate finance and M&A
Brokerage firms
Retail discretionary investment management
Retail investment advisory
If your sector is not listed above, we may still be able to assist.
Top 10 items for successful FCA application
We think that the following are very important for a successful application. Please read these alongside the further reading we have provided in the section below.
Overall proposition: It is important to have a strong business proposition that is designed in a way to achieve good outcomes for your clients / investors. You should consider your proposition from your client’s / investors perspective – if you were in their shoes why should they participate and what are the benefits to them.
Legal advice: Taking legal advice on the proposed business structure is very important and will definitely save time later if, after FCA scrutiny, it turns out that you are not seeking permission for the correct Regulated Activities, which may then have implications for your governance and financial position i.e. you may need additional people (some types of permission require to directors) or additional financial resources (the capital requirements for some types of permission are higher than others).
Sufficient experience: Make sure that you are able to clearly articulate to the FCA why you are qualified to undertake the activities for which you are seeking permission.
Financial projections: The FCA expects very detailed projections and for the projections to link to the assumptions that you are making in connection with the revenue and expenditure of your business and for this to tie into your business plan. Engaging a suitability qualified accountant may be useful.
Compliance and financial crime experience: For small businesses, it may not be financially viable to hire a full time, or even a part time, dedicated compliance resources. However, having such an individual within the business will greatly help in the application process. Alternatively, you may wish to assign someone in the business to take relevant compliance training courses and for that person to be supported by an outsourced compliance adviser.
Management information / Internal decision making: You should think about all the things that could go wrong in the business and, on the other hand, all how you are going to measure the success of the business and the actions and decisions that you will need to take on a day to day basis. You will them be able to craft template management information packs and decision making authority to help you monitor and manage the business on a day to day basis.
Policies: You will need a full FCA compliant policy suite.
Controls: In addition to compliant policies you will need to demonstrate how these will be translated into day to day actions. We find that a controls matrix will assist in this regard.
Attention to detail: There will be hundreds of pages that need to be submitted to the FCA. It will be important to take the time to study all the information you plan to provide and check it has been accurately completed and is internally consistent.
Ready to role: Lastly, and perhaps most importantly, you will need to demonstrate to the FCA that you are ready, if authorised on the day you submitted the application, to conduct regulated business.
How can we help?
We can assist with all aspects of making an application to the FCA. This includes:
Advice on business model, financial and operational matters
Project management
Drafting all relevant forms
Holding the pen on your regulatory business plan
Calculating your regulatory capital requirements
Assisting you respond to FCA queries
What happens once you are approved by the FCA?
Once you are approved by the FCA you can commence business. Please see our Outsourced Compliance service for how we can help you at this stage of your Journey.
