Financial Conduct Authority shares good practice and common shortcomings in authorisation and registration applications

The Financial Conduct Authority (FCA) published examples of good practice and areas for improvement drawn from firms’ applications for FCA authorisation or registration, as part of its support for applicants that can meet FCA standards. The FCA highlights three recurring themes in applications: having staff with appropriate skills, experience and capacity; maintaining robust, proportionate policies, procedures, systems and controls that deliver good customer outcomes; and evidencing financial resources appropriate to the nature and scale of the business. Examples of better submissions include firms providing their own suitability assessments for Approved Persons or Key Individuals, clear ownership structure charts identifying Controllers, credible plans to address resourcing gaps, and incentives that support good customer outcomes rather than sales volumes. Common issues include overreliance on compliance consultants, insufficient evidence on how individuals with multiple responsibilities will allocate time, weak evidence of eligibility to work in the UK or of a meaningful UK business commitment, generic or misaligned templated policies, inadequate consideration of customer scenarios including vulnerability, unclear IT implementation plans, missing historic accounts, inaccurate information, and insufficient evidence to demonstrate prudential resources. The FCA notes the publication should be read alongside its other authorisation information for firms.