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FCA Authorisation terms and phrases

FCA Authorisation Terminology

FCA Authorisation

The Financial Conduct Authority (FCA) Authorisation involves a lot of jargon, which if you are new to the financial services regulated world can take a lot of explaining.

The FCA uses specific terms and phrases related to FCA authorisation for financial firms. Here’s how you can find them:

1. FCA Handbook Glossary:

2. Specific Terms:

  • While browsing the glossary, keep an eye out for terms like:

    • Permitted: This indicates a firm is allowed to carry out a limited set of activities.

    • Authorised: This signifies a firm can perform a wider range of activities.

    • Scope of permission: This details the specific activities a firm is authorised for.

3. MiFID (Markets in Financial Instruments Directive):

FCA Authorisation
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  • The FCA regulates under MiFID, which has its own authorisation terminology. Look for terms like:

    • Investment firm: A firm authorised under MiFID to provide certain investment services.

    • Activities: Specific actions an authorised firm can take, like dealing in investments or providing investment advice.

Additional Tips:

  • Use the FCA website’s search function to find specific terms within their publications.

  • Consider browsing relevant FCA authorisation guidance for detailed explanations.

By using these steps, you should be able to identify the key terms and phrases related to FCA authorisation.

Below are the main terms needed for a basic grasp of the jargon used in your application for authorisation or registration. Links will be made available as the subjects are increased.

AML (Anti-Money Laundering) Monitoring– Solutions that support the prevention, detection, and reporting of money laundering activities.
AML Policies – Anti-money laundering policies and procedures that the firm must establish and maintain.
Anti-Money Laundering (AML) and Counter-Terrorist Financing – Obligations for businesses to help prevent money laundering and terrorist financing.
Application Pack – The set of documents and forms required for submission to the FCA for Authorisation or Registration.
Approval Process – The FCA’s evaluation of the application to decide if the firm can be authorised to operate.
Audit Findings – Results and discoveries made during the audit, including any instances of non-compliance. Internal or External.
Audit Scope – Defines the boundaries and focus areas of the audit, detailing which aspects of compliance will be reviewed.
Audit Trail – Comprehensive records that must be maintained to document transactions and changes within the firm.
Audit Trail Capabilities – Normally electronic/digital functionality that logs all compliance-related actions for accountability and inspection.
Authorisation Application – The formal request submitted to the Financial Conduct Authority (FCA) for permission to conduct regulated activities.
Capital Adequacy Requirements – CAR – Requirements for firms to maintain sufficient capital reserves to cover potential losses. Ensuring the firm has sufficient financial resources to manage risks and absorb losses.
Case Management Systems – Modules within compliance software that manage compliance incidents and investigations.
Client Assets Rules (CASS) – Specific rules on the holding and protection of client assets and money.
Client Money Protection – Rules and practices to ensure that client funds are protected and managed properly.
Client Money Rules – Guidelines on how businesses must handle money that belongs to clients.
Complaints Handling – Procedures for receiving, managing, and resolving customer complaints in compliance with FCA standards.
Compliance Arrangements – Details of the systems and controls the firm will put in place to comply with regulatory requirements and safeguard consumer interests..
Compliance Audit – Compliance Testing – Benchmark Audit -Regular assessments to ensure adherence to FCA guidelines and regulations.
Compliance Framework – The internal policies and procedures established to comply with FCA regulations.
Compliance Monitoring – Continuous oversight to ensure firms adhere to regulatory requirements and standards.
Compliance Monitoring Function – Features within compliance software that track and verify compliance with all applicable FCA guidelines.
Compliance Procedures – The systems and controls that a firm must have in place to comply with the regulatory requirements set by the FCA. Often includes a Compliance Manual.
Compliance Technology Solutions – Integrating technology tools that facilitate compliance with FCA regulations.
Compliance Testing – Compliance Audit – Benchmark Audit – Periodic checks to ensure that all parts of the organisation adhere to regulatory standards.
Compliance Training – Educational programs designed to enhance understanding and adherence to FCA regulations among employees and including Management.
Compliance/Risk Monitoring – Ongoing surveillance to ensure that risk controls are effective and regulations are followed.
Conduct of Business Sourcebook (COBS) – Rules focusing on how firms should conduct their business to ensure fair treatment of clients. This varies due to business model, CCA, Mortgage, Investment etc.
Conduct Risk – Risks associated with the behaviour of an institution that could lead to poor outcomes for customers or the market.
Consumer Duty – Consumer protection requirements by the FAC concerning consumer outcomes and the impact of cross-cutting rules.
Consumer Protection – Policies and practices designed to safeguard the interests of consumers dealing with financial services, a core focus for the FCA..
Consumer Protection Laws – Laws aimed at safeguarding the interests and rights of consumers in financial transactions.
Control Measures – Actions implemented to mitigate identified risks to an acceptable level.
Control Testing – Examination of internal controls and procedures to ensure they are effective in enforcing compliance.Controls need to be robust and located effectively.
Credit Risk – Risk of loss arising from a borrower’s failure to meet the terms of any contract with the firm or otherwise to perform as agreed.
Data Protection – Regulations on how firms should manage and protect the security and privacy of personal and financial data.
Data Security – Regulations ensuring the protection of personal and financial data against unauthorised access and breaches.
Data Security Features – Technologies that ensure the confidentiality, integrity, and availability of sensitive financial information.
Due Diligence – The process of verifying the compliance of business operations with FCA regulations. Also used to identify issues before reliance is placed on the person/business to manage your business.
Due Diligence Services – Businesses – Conducting thorough investigations to ensure compliance before business transactions or partnerships.
Enforcement Actions – Potential consequences for non-compliance with audit requirements, including fines and sanctions.
FCA Handbook – A comprehensive guide containing all the legal and regulatory obligations that must be met by firms seeking FCA authorisation. Different sections apply to each business model type or category – some are omnipresent.
Financial Crime Prevention – Measures and controls implemented by firms to prevent financial crimes such as money laundering, fraud and other financial crimes.
Financial Crime Prevention – Strategies to combat money laundering, fraud, and other financial crimes.
Financial Projections – Forecast of the business’s financial performance including profit, loss, and cash flow projections.
Financial Promotion – Rules on how financial products and services can be marketed and promoted to consumers. A core FCA focus.
Financial Reporting – Requirements for the accurate and timely submission of financial statements to the FCA.
Financial Resources – Evaluation of the firm’s financial stability and adequacy of financial resources.
Fit and Proper Test – Assessment of the suitability of key individuals within the firm to ensure they meet the necessary standards of honesty, integrity, and reputation.
Full Application – Submission of detailed ‘Application Pack’ documentation to the FCA, including business plans, risk assessments, and financial forecasts.
Governance – Structures and policies in place to manage compliance within the firm. Risk Framework, Compliance Framework, Financial Crime Framework etc.
Governance Practices – Structures and practices that ensure accountability, fairness, and transparency in the firm’s operations.
Governance Support – Helping firms establish proper governance structures that meet regulatory approval.
Initial Application – The first step where firms submit their ‘Application Pack’ to the FCA for review.
Internal Controls – Systems and processes to ensure compliance with regulations, prevent fraud, and safeguard assets.
KYC (Know Your Customer) – Integrated tools for conducting due diligence on customers to meet FCA requirements.
Liquidity Requirements – Rules ensuring firms have enough liquid assets to meet short-term obligations.
Liquidity Risk – The risk that a firm, though solvent, either does not have sufficient financial resources available to it to enable it to meet its obligations as they fall due, or can secure them only at excessive cost.
Market Conduct – Regulations controlling how firms behave in the financial markets to ensure fairness and transparency.
Market Risk – Risk of losses in positions arising from movements in market prices.
Money Laundering Regulations – MLRs – Regulations aimed at preventing money laundering activities within financial services.
Non-Financial Conduct Risk – Risks associated with the behaviour of an institution’s individuals that could lead to reputation damage and thus customer outcomes.
Ongoing Compliance – Continuous efforts to adhere to FCA regulations through regular audits and adjustments to policies, post-authorisation.
Operational Resilience – Requirements to ensure that firms can continue to operate and meet obligations despite adverse conditions.
Operational Risk – Risk arising from failures in internal processes, people, and systems.
Policy Development – Assistance in creating and implementing policies that comply with regulatory expectations.
Post-Audit Review – Follow-up activities conducted to ensure that corrective actions have been effectively implemented.
Pre-Application – Early engagement with the FCA to discuss the proposed business model and receive initial guidance.
Prudential Regulation – Standards that firms must meet to ensure they are financially healthy and well-managed.
Prudential Requirements – Capital and liquidity requirements that firms must meet to ensure they are financially robust.
Prudential Standards – Regulatory requirements ensuring the financial stability and integrity of financial institutions, including capital adequacy and liquidity.
Regulatory Advisory – Services providing guidance on how to navigate and comply with FCA regulations.
Regulatory Business Plan – A comprehensive & compliance technical document that outlines the firm’s business model, market analysis, operational plans, and risk management strategies.
Regulatory Business Plan – A comprehensive outline of the business model, strategy, products, operational structure, compliance measures, governance, risk management frameworks and market analysis.
Regulatory Change Management – Consulting services that help firms adapt to new and updated FCA regulations.
Regulatory Framework – The set of rules and guidelines established by the FCA that firms must adhere to.
Regulatory Intelligence – Tools that keep the firm updated with the latest FCA regulations and changes in the compliance landscape.
Regulatory Reporting – Requirements for reporting operational, transactional, risk assessment and financial details to the FCA to demonstrate compliance.
Regulatory Reporting Tools – Software designed to facilitate the accurate and timely reporting of financial activities to the FCA.
Remediation Plans – Strategies and actions taken to correct deficiencies found during the audit. Independent implementation and embedding is recommended.
Reporting Solutions – Providing support in meeting the FCA’s reporting requirements, including financial and transaction reports.
Risk Analysis – Analysing the nature of identified risks and determining their potential impact.
Risk Assessment – Evaluation of risks associated with the firm’s business model, potential risks associated with non-compliance and their impact and strategies for managing those risks.
Risk Evaluation – Comparing estimated risks against risk criteria to prioritise their management.
Risk Identification – The process of recognizing and documenting potential risks within an FCA-regulated environment.
Risk Management – Processes and procedures for identifying, assessing, managing mitigate potential risks affecting compliance within financial institutions.
Risk Management Consulting – Advising firms on how to identify, assess, and mitigate risks in compliance with FCA requirements. Compliance COnsultant are specialist advisors.
Risk Management Framework – Strategies for identifying, assessing, managing, and monitoring risks.
Risk Management Systems – Tools that help identify, assess, and manage risks according to FCA regulations.
Senior Managers and Certification Regime (SM&CR) – Rules aimed at improving individual accountability and integrity in financial firms.
Systems and Controls – Implementation of robust internal systems to manage the firm’s operations and compliance effectively.
Threshold Conditions – Minimum standards the firm must meet to be authorised by the FCA.
Training and Education Modules – Features that provide regulatory compliance training to employees directly within the platform.
Training Programs – Educational services designed to update and train firm personnel on compliance matters.

Assistance in your FCA Authorisation Application is recommended and we can provide staggered payment, fixed price options.

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