Introduction: What FCA Authorisation Means
FCA authorisation is the UK's regulatory gateway for firms carrying out specified financial services activities. Operating without the right permission is a criminal offence under FSMA section 19, with penalties of up to two years' imprisonment and an unlimited fine. Some agreements made by an unauthorised firm may also be unenforceable.
The commercial and reputational risks arrive sooner. Banks, investors and partners check the Financial Services Register before they commit.
This guide covers:
- whether authorisation applies to you
- how to pick the right permission or alternative route
- what the FCA expects in an application
- what obligations continue after approval
Key Takeaways
- Authorisation is activity-specific, so permissions must match what the firm actually does.
- Direct authorisation, registration, exemptions and appointed representative status are different routes.
- A strong application aligns the business plan, governance, senior managers, capital and controls.
- Approval starts supervision. It does not end it.
What Is FCA Authorisation and Who Needs It?
What does FCA authorisation mean?
FCA authorisation is permission to carry on regulated activities in the UK. The FCA Handbook glossary describes an authorised person as one with "Part 4A permission to carry on one or more regulated activities".
The FCA's operational objectives are consumer protection, market integrity and effective competition. Authorisation is followed by supervision.
It is not company registration. Incorporating at Companies House creates a legal entity, but it gives you no right to conduct regulated business.
Which businesses may need FCA authorisation?
Check each business against the FCA's perimeter guidance (PERG). Typical candidates include:
- Payments and e-money firms: authorised or small institutions under separate statutory regimes
- Consumer credit businesses: lenders and brokers
- Investment firms: advisers, wealth managers, platforms, SIPP operators and regulated crowdfunding
- Insurance intermediaries: especially those holding client money
- Cryptoasset businesses: currently money laundering registration, with a new regime expected on 25 October 2027
- Firms holding client money or assets: permissions must align with the operating model
FCA authorisation, registration, exemptions and appointed representative status
| Route | Legal status | Typical scope | Responsibility |
|---|---|---|---|
| Part 4A permission | Authorised person | Specified regulated activities | The firm itself |
| Registration | Regime-specific | Small payment/e-money firms, AML supervision | The registered entity |
| Appointed representative | Exempt, subject to conditions | Activities the principal accepts | The principal |
Do not rely on an exemption until you have confirmed that your whole operating model fits. An appointed representative operates under an authorised principal's responsibility, and the principal must ensure its fitness, propriety and compliance.
Choosing the Right FCA Permission or Route
Map the business model to regulated activities
Before choosing permissions, map the following against the regulated-activities perimeter:
- products and customer types
- revenue flows and marketing
- money movement and custody
- advice, lending, payments and investment activity
Mapping first prevents the common error of applying for permissions that do not fit the real model.
Limited versus full permission
Consumer credit makes the distinction clear. Limited permission covers only specified credit-related activities and has fewer threshold conditions. All other firms need full permission, though the application process is the same.
A retailer introducing finance for its own goods or services can qualify as a limited-permission credit broker. It must need no other permissions, broking must not be its main business, and it must not supply goods for domestic premises. Classification always depends on your exact services.
Sector-specific considerations
Requirements differ by sector. Payment and e-money firms apply under the Payment Services Regulations 2017 or Electronic Money Regulations 2011. Small payment institutions sit under an average monthly payment-transaction threshold of €3 million, and small e-money issuers cannot exceed €5 million in outstanding e-money. Confirm current rules on the FCA's sector pages before you commit to a route.
Direct authorisation versus appointed representative status
Appointed representative status can suit a firm testing a proposition. It brings faster entry but less control: the principal sets the boundaries, oversees you and carries responsibility.
It tends to be unsuitable if you want to own the customer proposition or add regulated activities. Introducer appointed representatives are limited to introductions and non-real-time financial promotions. Direct authorisation gives independence, at the price of full compliance responsibility.
FCA authorisation versus PRA or other approval
FCA authorisation alone does not cover every obligation. Consider:
- PRA: banks, building societies, credit unions, insurers and major investment firms are dual-regulated
- ICO: most organisations processing personal data owe a data protection fee
- Financial crime: money laundering and sanctions obligations apply separately
- Overseas firms: those carrying on UK-regulated activities need FCA authorisation
How to Prepare and Apply for FCA Authorisation
Confirm scope, entity and strategy first
Settle these before drafting anything:
- the applicant entity, ownership and group structure
- proposed activities, customer journey and fund flows
- distribution model and target market
- permissions sought and use of third-party providers
The application must describe the business as it will actually operate. A clear ownership and controller chart is cited by the FCA as good practice.
Build a credible regulatory business plan
The plan must explain your activities and show sufficient capital, with financial information to corroborate it. Link the commercial forecasts to governance, risk management, compliance resources, operational resilience, complaints handling and customer outcomes.
Capital varies by firm type. Examples from FCA sources:
| Firm type | Initial requirement |
|---|---|
| Authorised payment institution | EUR 20,000 to EUR 125,000, by service |
| Authorised e-money institution | EUR 350,000 |
| MIFIDPRU investment firm | £75,000 to £750,000, by activity |
| Insurance distribution | Higher of £5,000 or 2.5% of income (no client money) |
Application fees are separate. The 2026/27 scale runs from £280 to £225,170. Limited consumer credit sits in category 2; authorised e-money institutions sit in category 5.
The FCA's September 2025 good-practice review flags missing historic accounts, unverified financial resources, generic policies and unclear IT arrangements as common weaknesses.
Identify senior managers and compliance functions
Senior managers performing a Senior Management Function need FCA approval before they start, plus a Statement of Responsibilities. The FCA looks at honesty, integrity and reputation, competence and capability, and financial soundness.
Leaving compliance, risk or MLRO responsibilities unresolved weakens an application. The FCA scrutinises whether SMF16 and SMF17 holders have enough time and capability.
Fraxtional's fractional model can help eligible fintech, crypto, payments, banking and embedded-finance applicants fill these roles. Directors provide compliance, risk, AML, governance and regulatory-readiness support, including MLRO and CAMLO, without a full-time hire.
That support covers readiness only and does not guarantee approval.
Prepare policies, systems and controls
Expect to evidence:
- AML and financial-crime controls, customer due diligence and sanctions screening
- complaints processes and Consumer Duty arrangements
- risk and compliance monitoring
- outsourcing oversight (outsourcing does not transfer your responsibility)
- cyber controls and incident management
- safeguarding or client-money arrangements, where relevant
- customer journey documentation
Policies must be specific to your firm. Generic templates are a known weakness.
Submit through Connect and manage the review
Apply through the FCA's Connect system, using the forms on the relevant sector page. Complete the forms, upload supporting documents, pay the fee and check the application for internal consistency. Keep evidence of submission.
Expect an acknowledgement, case-officer questions, requests for clarification and possible senior-manager discussions. Answer promptly, completely and transparently.
On timing, FSMA s55V sets six months for complete applications and twelve months for incomplete ones. For new firms in April to June 2026, the FCA reported a median of 131 days from receipt to determination.
FCA sector pages quote their own assessment timeframes, so check those before planning a launch.
What Happens After Authorisation?
Confirm the decision and verify permissions
Read the decision, limitations and requirements carefully. Then check the Financial Services Register to confirm that the legal entity, trading names and permissions match your intended proposition. Do not launch or expand anything the Register does not show.
Maintain ongoing compliance
Authorisation brings continuing duties:
- regulatory reporting through RegData, and annual periodic fees
- financial crime controls and governance
- Consumer Duty monitoring, including an annual governing-body report
- complaints handling and recordkeeping
- capital and safeguarding requirements where they apply
- notifications under Principle 11 and SUP 15
Payments and e-money firms should note the supplementary safeguarding rules in force since 7 May 2026.
Manage changes
Do not rely on outdated permissions. Plan ahead for:
- Change in control: approval is required before acquiring or increasing control, and failure is a criminal offence
- New activities, products or client types: these may need a variation of permission through Connect
- New senior managers: approval is needed before they start
Authorisation does not automatically cover new activities. Monitor FCA rules and Register information as your model evolves.
Frequently Asked Questions
How do I obtain FCA authorisation?
Map your activities to permissions, prepare the business plan, people and policies, then submit through Connect and respond to FCA questions. Verify current requirements and fees before applying.
What is FCA authorisation?
It is regulatory permission to conduct specified financial services activities in the UK. It is not company registration or a general licence.
What type of FCA authorisation do I need?
It depends on your regulated activities. The route may be direct authorisation, limited or full permission, registration or an appointed representative arrangement.
Who is an FCA authorised person?
A person or firm with FCA permission for specified activities. Check the legal entity, status and exact permissions on the Financial Services Register.
How do I check FCA authorisation?
Search the Financial Services Register or FCA Firm Checker using the firm's legal name or reference number. Verify status, permissions, trading names and restrictions. A firm's absence from the Warning List is no assurance that it is authorised.
