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Mastering Financial Forecasts for Your FCA Application: A Step-By-Step Guide

Mastering Financial Forecasts for Your FCA Application

Financial Forecasts

Financial Forecasts: A Crucial Element for FCA Authorisation

Seeking FCA Authorisation or Registration necessitates the submission of an exhaustive financial forecast, spanning a period of three years. This component is vital, underscoring the organisation’s competency in sustaining robust operational frameworks, sufficient resources, and standardised procedures.

Precision in detailing is paramount for the forecast, comprising a comprehensive Profit & Loss Statement, Balance Sheet, and Cash Flow statement. Clarity in the rationale behind these assumptions is essential, with a distinct separation from the financial projections themselves.

Incorporate a succinct overview of this forecast in the Regulatory Business Plan (RBP) and ensure the full forecast model is included in your application dossier.

The financial forecast will be rigorously evaluated by the regulator’s designated case officer. This evaluation is crucial to ensure alignment between the forecast, its foundational assumptions, and various facets of the application, such as human resources and contractual outsourcing.

The examination primarily revolves around:

– Adherence to capital requirements.
– Assessment of the firm’s ongoing financial viability, evaluated against the ‘going concern’ principle.

Inclusion of stress-tested financial projections is also a mandatory part of the application process.

This guidance aims to aid in constructing a solid financial forecast for your application. The execution of stress testing falls under the purview of your accounting or financial department, adhering to specific protocols.

Should you require expert assistance, Compliance Consultant offers connections to specialists in crafting all-encompassing financial forecasts.

Timeline for the Financial Forecast

The forecast should reflect a three-year period commencing from the anticipated authorisation date. First, identify your organisation’s fiscal year-end or the accounting reference date (ARD). For entities within a group, it’s prudent to synchronize the ARD across the group.

Given the regulator’s usual six-month review period post-application submission, strategise which financial years your forecast will encompass. For example, a submission in March with a fiscal year-end on December 31st should include the current financial year. In contrast, a September submission would logically commence with the subsequent financial year.

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