"Investment services licence" is an informal term. In the UK, a firm that wants to carry on investment business applies to the FCA for permission under Part 4A of the Financial Services and Markets Act 2000 (FSMA). The permission lists each regulated activity the firm may carry on, the types of investment it covers and the clients it may serve. Firms carrying on MiFID investment services, such as portfolio management, investment advice and order execution, are known as MIFIDPRU investment firms.
The questions below are those most often asked by founders and boards preparing an application. The full process is set out on the firm's UK investment firm authorisation page.
| Business | Typical permissions |
|---|---|
| Wealth or discretionary manager | Managing investments, advising, arranging, with or without client money |
| Investment adviser | Advising on investments, arranging deals, making arrangements |
| Broker | Arranging deals, dealing as agent, executing orders for clients |
| Proprietary or principal trader | Dealing in investments as principal |
| Trading venue | Operating a multilateral or organised trading facility |
It is FCA authorisation with Part 4A permission for the investment activities a firm carries on. Authorisation is needed because FSMA prohibits anyone from carrying on a regulated activity in the UK unless they are authorised or exempt.
Applications are made through the FCA's Connect system. The firm submits the application form, a regulatory business plan, financial projections, its capital and liquidity assessment, governance and compliance arrangements, policies, and forms for each senior manager and each controller, together with the application fee.
Activities include dealing in investments as principal or agent, arranging deals, managing investments, advising on investments, safeguarding and administering investments, and operating a multilateral or organised trading facility. The Regulated Activities Order defines each activity and the investments it covers.
Some business falls outside authorisation. The Regulated Activities Order contains exclusions for specific situations, and a firm can act as an appointed representative of an authorised principal that accepts responsibility for it. An appointed representative is exempt only for the activities its principal agrees to cover.
Yes. An overseas group can establish a UK subsidiary, which applies like any UK firm, or in some cases apply for authorisation of a UK branch. The FCA expects the UK business to be managed and supervised effectively from the UK, with senior managers who are accountable for it.
No. Carrying on a regulated activity without authorisation or an exemption breaches the general prohibition in section 19 of FSMA, which is a criminal offence under section 23. Agreements made in breach can also be unenforceable against the customer.
The permanent minimum capital requirement in MIFIDPRU 4.4.1R depends on the firm's permissions. The highest applicable amount applies.
| Activity | Permanent minimum requirement |
|---|---|
| Reception and transmission of orders, execution of orders, portfolio management, investment advice, placing without firm commitment | £75,000 |
| Holding client money or client assets, or operating an MTF | £150,000 |
| Permission to provide targeted support | £500,000 |
| Dealing on own account, underwriting or placing on a firm commitment basis | £750,000 |
| Depositary of a UK UCITS or authorised AIF | £4 million |
For example, a firm with permission for portfolio management and investment advice that also holds client money has a permanent minimum requirement of £150,000.
No. A firm must hold own funds at least equal to its own funds requirement at all times. For a small and non-interconnected (SNI) firm, that is the higher of the permanent minimum requirement and the fixed overheads requirement. For a non-SNI firm, it is the highest of those two and the K-factor requirement.
One quarter of the firm's relevant expenditure in the preceding year, under MIFIDPRU 4.5.1R. It represents the cost of running the firm for three months while it winds down in an orderly way, and for a new firm it is calculated from projected expenditure.
Under MIFIDPRU 1.2.1R, an SNI firm holds no client money or client assets and stays below each of these thresholds:
| Measure | SNI threshold |
|---|---|
| Assets under management | Less than £1.2 billion |
| Client orders handled, cash trades | Less than £100 million per day |
| Client orders handled, derivatives | Less than £1 billion per day |
| On and off balance sheet total | Less than £100 million |
| Annual gross revenue from investment services | Less than £30 million |
Yes. Under MIFIDPRU 6.2.1R, a firm must hold core liquid assets equal to at least one third of its fixed overheads requirement plus 1.6% of any guarantees provided to clients. Each firm also runs an internal capital adequacy and risk assessment (ICARA), its own assessment of the capital and liquidity it needs for its risks and for an orderly wind-down.
The FCA's application fees were last updated on 13 July 2026. The fee depends on the type of firm.
| Firm type | FCA application fee |
|---|---|
| Most intermediary applications | £2,820 |
| Most MiFID investment managers | £11,260 |
| Most principal trading firms | £11,260 |
| Most CFD firms | £11,260 |
| MTF and OTF operators | £56,300 |
Once authorised, the firm also pays annual periodic fees and levies, including the Financial Ombudsman Service and the Financial Services Compensation Scheme, which depend on its activities and size.
The FCA usually assesses a complete FSMA application within 6 months, and an incomplete application can take up to 12 months. Preparation before submission depends on how settled the business model, team and capital are.
| Stage | Typical duration |
|---|---|
| Preparation of a complete application | Depends on readiness of the model, team and capital |
| FCA decision, complete application | Usually within 6 months |
| FCA decision, incomplete application | Up to 12 months |
Senior managers, such as the chief executive, the chair and the compliance oversight and money laundering reporting functions, need FCA approval under the Senior Managers and Certification Regime before taking up their roles. Most changes under the FCA's PS26/6 review took effect on 24 April 2026, as explained in SM&CR explained.
The FCA assesses whether the firm will meet the threshold conditions: effective supervision from the UK, appropriate financial and non-financial resources, suitable people and a viable business model. A complete, firm-specific application with realistic projections is the strongest support for a timely decision, as set out in applying for FCA authorisation.
A complete application is the main influence on the FCA's timetable. The documents below form the core of most investment firm applications.
| Document | What it shows the FCA |
|---|---|
| Regulatory business plan | The activities, clients, products, distribution and revenue model |
| Financial projections | Three years of forecasts, with own funds and liquidity headroom |
| ICARA assessment | The capital and liquidity the firm needs for its risks and an orderly wind-down |
| Governance arrangements | Board composition, committees and the responsibilities map |
| Compliance monitoring plan | How the firm will test its controls in the first year |
| Financial crime framework | The business-wide risk assessment, AML and sanctions policies |
| Client asset arrangements | CASS procedures and bank or custodian arrangements, where relevant |
| Individual and controller forms | Fitness and propriety of senior managers and owners |
Policies should be specific to the firm's own model and staff should be able to explain them, since the FCA may interview senior managers during its assessment.
The firm must continue to meet the threshold conditions, the Principles for Businesses, the Consumer Duty for retail business, the conduct rules in COBS, the prudential rules in MIFIDPRU, systems and controls in SYSC, and its reporting obligations. Compliance monitoring tests whether these controls operate in practice.
Firms with retail clients must deliver good outcomes on products and services, price and value, consumer understanding and consumer support, and the board must assess those outcomes each year. More detail is in the guide to Consumer Duty compliance in 2026.
Yes, if the permission covers both. COBS 3 requires the firm to categorise each client as retail, professional or an eligible counterparty, and retail clients receive the highest level of protection.
Financial promotions must be fair, clear and not misleading under COBS 4, with additional restrictions for certain high-risk investments marketed to retail clients. Data protection law applies to marketing that uses personal data.
Under DISP, the firm needs a written complaints procedure, must resolve complaints fairly and promptly, and must tell eligible complainants about their right to refer the complaint to the Financial Ombudsman Service. The FCA's new complaints reporting rules apply from the period starting 1 January 2027.
Records of MiFID business must be kept for at least five years under SYSC 9.1.2R. Records must be accurate, complete and retrievable, and include recordings of telephone conversations and electronic communications that relate to client orders.
MIFIDPRU firms submit prudential returns on own funds, liquidity and, for non-SNI firms, K-factors, along with financial statements, complaints data and transaction reports for reportable instruments. Event-driven notifications are required for significant breaches and other specified events.
Yes. Investment management, technology and administration can be outsourced, but the firm remains responsible and must oversee the provider under SYSC 8. A trading name can be used if it is registered with the FCA and shown on the FCA Register.
Yes. Digital platforms are subject to the same conduct rules, with particular attention to suitability or appropriateness assessments, the clarity of information shown on screen, and operational and cyber resilience.
Only with the relevant permission and under the CASS client asset rules, which require segregation, daily reconciliations, acknowledgement letters from banks and custodians, and a resolution pack. Holding client money also raises the permanent minimum requirement to £150,000.
Yes, with permission for managing investments. The firm must assess suitability for each client, set out its mandate and report to clients on performance and costs.
For non-advised sales of complex products, COBS 10A requires an appropriateness assessment of the client's knowledge and experience. Product governance rules require the firm to define a target market for each product it manufactures or distributes.
Generally yes. Serving professional clients and eligible counterparties still requires permission, although some conduct rules apply in a modified form. The exact position depends on the activities and the clients.
UK authorisation covers business carried on in the UK. UK firms lost EU passporting rights on 31 December 2020, so serving clients in another country depends on that country's rules, which may require a local licence, an EU-authorised entity or reliance on a local exemption.
At least annually as part of a risk-based compliance monitoring plan, and whenever the business, its products or the rules change. Adding a new activity requires a variation of permission before the activity starts. The firm's forex and investment practice supports firms through authorisation and their first years of supervision.
Not as a single licence. A firm applies for FCA authorisation with Part 4A permission for each investment activity it will carry on.
Under MIFIDPRU 4.4, £75,000 for advice, portfolio management and order handling, £150,000 if the firm holds client money or assets, and £750,000 for dealing on own account.
£11,260 for most MiFID investment managers and principal trading firms, and £2,820 for most intermediary applications.
The FCA usually decides a complete application within 6 months; an incomplete application can take up to 12 months.
A small and non-interconnected investment firm that holds no client money or assets and stays below thresholds including £1.2 billion of assets under management and £30 million of annual revenue.
Yes. Advising on investments is a regulated activity that requires FCA authorisation unless an exemption, such as appointed representative status, applies.
At least five years for MiFID business under SYSC 9.1.2R.
Buckingham Capital Consulting has worked on FCA authorisations since 2013, obtaining FCA permissions and variations of permission for firms including Moneliq, Nexpay and Orbital. For investment firms, the firm prepares the regulatory business plan, MIFIDPRU capital and liquidity assessment, ICARA and governance arrangements, and supports the senior manager applications.
Speak to an expert: WhatsApp +44 7563 115980, Telegram @buckinghamcapital or info@buckinghamcapitalconsulting.co.uk.
This article is general information, reviewed against the regulator’s published requirements on the date shown. It is not legal advice; the regulator’s current publications take precedence.