Do you need FCA Authorisation or does your company really need to be FCA authorised?
Generally, if you are engaged in financial services in the UK then you will require FCA authorisation. As a specialised regulatory compliance consultancy, we don’t like to use generalisations.
All too often we get enquiries from companies who are unsure, but their accountant/bank/business partners, who mean well, but incorrectly state that they need authorisation.
Essentially, if you are not taking money for investment (or their derivatives) , pension, holding as a saving, promising an insurance protection or cover for insured events, mortgage related, transmitting or storing the money, you will probably not need any FCA Authorisation. However, that said, it is no help when faced with the blocking of your bank account application for your startup, so we, at Compliance Consultant, provide a service for clients where we apply the business tests that the FCA use to the business model and then provide a bespoke report using all the citations, exemptions and exceptions that may (or may not) apply to your business status. Then, if you do need to be authorised we will discount the cost from your application if you do it with us. Full details of the FCA Application process can be found HERE
So is it right for you?
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So what activities are requiring FCA authorisation?
Under the Financial Services and Markets Act 2000 (FSMA), a person carrying out a specified activity relating to a specified instrument requires FCA authorisation. If you carry out such activities without appropriate authorisation you may be committing a criminal offence under FSMA.
The following are listed as Specified Activities include but not limited to:
- accepting deposits
- payment services
- consumer credit regulated activities
- insurance-related activities
- investment activities (eg advising on investments, managing investments)
- mortgage-related activities
- Specified investments include, but are not limited to:
- electronic money
- consumer credit and consumer hire agreements
- contracts of insurance
- shares
- contracts for difference (CFDs)
- debt instruments (bonds, notes etc.)
- deposits
- futures
- pension scheme rights
If you conduct any of these specified activities for specified instruments as a business then you will require FCA authorisation. If you are unsure whether your business activities require FCA authorisation, our team of experts can help you understand your regulatory obligations.
Who is exempt from FCA authorisation?
Many companies need not be registered or authorised, however, FSMA, the Payment Services Regulations 2017 and the Electronic Money Regulations 2011 provide for certain exemptions from FCA authorisation for:
- Agents of payment institutions and electronic money institutions.
- Appointed representatives.
- Recognised investment exchanges and clearing houses.
- Professional firms, such as solicitors, accountants or actuaries.
Those businesses listed in an FSMA exemption order for certain regulated activities. For example, local authorities are exempt in respect of accepting deposits, and the Band of England and IMF are exempt for most activities except for carrying out contracts of insurance.