FCA authorisation is the legal permission to carry on regulated financial services in the UK. Section 19 of the Financial Services and Markets Act 2000 (FSMA) sets the general prohibition: no one may carry on a regulated activity in the UK unless they are authorised or exempt. Breaching it is a criminal offence, and agreements made in breach can be unenforceable against the customer.
The Financial Conduct Authority (FCA) grants most permissions. It regulates the conduct of around 35,500 firms and is the prudential supervisor, meaning it sets capital and liquidity standards, for around 34,000 of them. Banks, building societies, insurers and the largest investment firms are dual-regulated: the Prudential Regulation Authority (PRA) at the Bank of England authorises them with the FCA's consent.
Three terms are often used interchangeably. Under FSMA, a firm applies for a Part 4A permission, which lists the exact regulated activities it may carry on. Payment institutions and e-money institutions are authorised under separate regulations: the Payment Services Regulations 2017 and the Electronic Money Regulations 2011. Some businesses, such as small payment institutions and cryptoasset firms under the Money Laundering Regulations, are registered rather than authorised, which carries a lighter set of requirements.
The route matters because it sets the fee, the capital, the documents and the timetable. A firm that applies for the wrong permission has to withdraw and start again, so the first step is always to map the business model to the exact activities.
A firm needs authorisation if it carries on a specified activity, in relation to a specified investment, by way of business, in the UK. The FCA's Perimeter Guidance manual (PERG) explains each activity and the exclusions that take some businesses outside the regime. The main routes are below.
| Business | Typical activities | Legal route |
|---|---|---|
| Payments and remittance | Money remittance, payment accounts, card acquiring, payment and account information services | Payment Services Regulations 2017 |
| E-money | Issuing e-money, prepaid cards, e-wallets | Electronic Money Regulations 2011 |
| Consumer credit | Lending, credit broking, debt counselling, debt collection, credit information | FSMA Part 4A |
| Investments | Advising, arranging, dealing, managing investments, operating trading venues | FSMA Part 4A |
| Insurance | Insurance distribution and broking; underwriting (PRA-led) | FSMA Part 4A |
| Home finance | Mortgage lending, arranging and advising; home reversion and home purchase plans | FSMA Part 4A |
| Claims management | Seeking out, advising on and pursuing claims | FSMA Part 4A |
| Cryptoassets | Exchange and custody (registration now; full authorisation from 25 October 2027) | Money Laundering Regulations; FSMA from 2027 |
Some businesses can operate without their own permission. An appointed representative carries on regulated activities under the responsibility of an authorised principal firm. Professional firms whose financial services are incidental to their main work may fall within an exclusion, and certain activities, such as limited network payment instruments, are excluded from the payments regime. The FCA asks firms to confirm the position before they apply, and a firm should not start regulated business while its application is under review unless an exemption applies.
Cryptoasset firms are in a transition. The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 bring cryptoasset activities into FSMA. The FCA application window opened on 30 September 2026 and runs to 28 February 2027, and the new regime commences on 25 October 2027; until then the existing Money Laundering Regulations registration applies. The firm's guide to FCA cryptoasset authorisation covers that route in full.
The threshold conditions are the minimum standards every firm must meet at the point of authorisation and at all times afterwards. They are set out in FSMA Schedule 6 and explained in the COND sourcebook of the FCA Handbook. The case officer assesses each of them against the application.
| Condition | What the FCA looks for |
|---|---|
| Location of offices | A UK-incorporated firm has its head office and registered office in the UK. The head office is where the directors and senior managers make the day-to-day decisions, not a virtual or shared address. |
| Effective supervision | A group structure, ownership and close links that do not prevent the FCA from supervising the firm, and accurate information supplied on request. |
| Appropriate resources | Enough capital and liquidity for the business plan, plus the people, systems and outsourcing arrangements to run it safely. |
| Suitability | A fit and proper firm, judged on the honesty, competence and financial soundness of its directors, senior managers and controllers. |
| Business model | A model that is suitable for the activities, sustainable, and designed to give customers fair outcomes. |
The FCA tests suitability using the application itself and information from other sources, including other UK and overseas regulators, its own contact centre records and complaints data. A firm meets the conditions most clearly when its business plan, financial forecasts, risk assessment and policies tell the same story in the same numbers.
The FCA authorises firms, but it decides largely on people. It looks for a board and management team with the knowledge and experience to run the specific business applied for, and for controllers whose source of funds and background are clear.
For FSMA firms, the Senior Managers and Certification Regime (SM&CR) applies. Each person in a senior management function, such as the chief executive (SMF1), chair (SMF9) or compliance oversight (SMF16), is approved by the FCA before they start, against a Statement of Responsibilities that sets out what they are accountable for. The FCA aims to decide senior manager applications within 2 months. The firm's SM&CR guide explains the functions and the 2026 reforms.
Payment and e-money institutions sit outside the senior managers regime. Their directors and the people responsible for managing payment services are assessed for fitness and propriety as part of the authorisation itself.
The test covers three things: honesty, integrity and reputation; competence and capability; and financial soundness. Firms carry out their own checks before submitting, including criminal record checks for individual controllers, which the FCA asks to be no more than 6 months old at the date of application. Any adverse history, however minor, is best disclosed with an explanation.
The FCA expects the main control functions to be in place, not promised. That normally means a money laundering reporting officer (MLRO), a compliance officer, and finance and risk leadership proportionate to the firm's size. The firm's article on hiring MLROs and heads of compliance sets out what the FCA looks for in each role.
Most staff in FSMA firms are bound by the individual conduct rules, which grew out of the Parliamentary Commission on Banking Standards' work after the 2008 financial crisis. Every individual must act with integrity; act with due skill, care and diligence; be open and cooperative with the FCA, the PRA and other regulators; pay due regard to the interests of customers and treat them fairly; observe proper standards of market conduct; and act to deliver good outcomes for retail customers.
Applications are made through Connect, the FCA's online system, using the forms for the route applied for. The core pack is similar across sectors.
The FCA reviews only final documents that the board has approved. Drafts, placeholders and unexplained inconsistencies between documents lead to questions that extend the assessment, so the pack is best checked end to end before submission. The firm's free FCA application gap checker runs that check against the FCA's expectations.
Every firm must hold adequate financial resources, and some routes set a fixed minimum on top. The FCA looks at both: the legal minimum, and whether the firm can meet its liabilities as they fall due across the forecast period, including under stress. It expects the funding to be in place, with a clear and verified source.
| Firm type | Minimum initial capital |
|---|---|
| Authorised payment institution: money remittance only | €20,000 |
| Authorised payment institution: payment initiation services | €50,000 |
| Authorised payment institution: other payment services | €125,000 |
| Authorised electronic money institution | €350,000 |
| Investment firms | Set by the MIFIDPRU sourcebook according to the permissions held |
| Consumer credit firms | No fixed minimum for most firms; adequate resources assessed on the business plan |
Payment and e-money capital is fixed in euros by the Payment Services Regulations 2017 and the Electronic Money Regulations 2011. Beyond the minimum, the FCA expects most new firms to show they can fund their operating costs for a sustained period without relying on revenue that has not yet been earned.
The FCA charges a one-off application fee, paid through Connect when the application is submitted. The fee is set by the type of application, in pricing categories published on the FCA's application fees page (last updated 13 July 2026).
| Category | Fee | Typical applications |
|---|---|---|
| 1 | £280 | Consumer buy-to-let firms with a Part 4A permission; community finance organisations |
| 2 | £560 | Limited permission consumer credit; Money Laundering Regulations registration; variation within the same fee-block |
| 3 | £1,130 | Small payment institution; small e-money institution; account information service provider; straightforward consumer credit |
| 4 | £2,820 | Authorised payment institution (certain services); straightforward investment, insurance intermediary and corporate finance firms |
| 5 | £5,640 | Authorised e-money institution; authorised payment institution (most services); moderately complex consumer credit |
| 6 | £11,260 | Complex consumer credit; claims management; cryptoasset businesses; most MiFID investment managers |
| 7 | £28,150 | Banks and insurers |
| 8 to 10 | £56,300 to £225,170 | Trading venues and recognised investment exchanges |
The fee is not refunded if the application is withdrawn or refused; it is refunded only if the FCA rejects the application at the outset for missing minimum information. Once authorised, the firm pays annual periodic fees based on its fee-block and the size of its business, plus levies such as the Financial Ombudsman Service and, where relevant, the Financial Services Compensation Scheme. The full cost of a project also includes capital, key hires, systems, professional indemnity insurance where required, and audit.
FSMA section 55V gives the FCA 6 months to decide a complete application and 12 months from receipt to decide an incomplete one. In July 2025 the FCA announced faster targets, measured from January 2026, and it reports its performance against them each quarter.
| Application | Complete | Incomplete |
|---|---|---|
| Statutory maximum (FSMA s.55V) | 6 months | 12 months |
| FCA target: new FSMA firm | 4 months | 10 months |
| FCA target: payment and e-money firms | 3 months | 10 months |
| FCA target: senior manager approval | 2 months | 2 months |
In Q1 2026/27 the FCA's median time to determine a new firm authorisation was 131 days, about 4.3 months, with a quarter of cases decided within 91 days. For payment and e-money authorisations and registrations the median was 219 days, about 7.2 months. An application counts as complete only once the FCA has every piece of information it needs, so the clock in practice runs from the point the last answer is accepted. The firm plans payment and e-money authorisations at 6 to 8 months from submission, which matches that published median and allows for the case officer's rounds of questions.
The FCA describes the applicant it wants to see in three words. Ready means the firm has read the FCA's published material and submits final documents. Willing means it is open with the case officer and answers questions quickly and fully. Organised means its arrangements are in place, so that it could start providing its products and services on the day it is authorised. The FCA's good and poor practice publication gives examples of each.
Where the case officer has concerns, the FCA gives informal feedback first, and the firm can supply more information, change its plan or withdraw and reapply later when ready.
| Outcome | What it means | Fee |
|---|---|---|
| Approved | Firm added to the Register with its permissions | Not applicable |
| Rejected | Returned at the outset for missing minimum information; can be resubmitted at any time | Refunded |
| Withdrawn | Firm ends the assessment; can reapply when ready | Not refunded |
| Refused | Formal decision that the threshold conditions are not met | Not refunded |
If the case officer recommends refusal, an FCA executive decision-maker reviews the case and may issue a Warning Notice. The firm can make written representations within the period stated in the notice. If the decision-maker still refuses, a Decision Notice follows, which the firm can refer to the Upper Tribunal; otherwise the FCA issues a Final Notice and may publish it. A firm can withdraw during the informal feedback stage, which avoids a formal refusal on its record.
The Consumer Duty has applied to open products since 31 July 2023 and to closed products since 31 July 2024. It requires firms serving retail customers to act to deliver good outcomes: to act in good faith, avoid foreseeable harm and enable customers to pursue their financial objectives.
The FCA now expects applicants to show how the Duty is built into the business from the start, across its four outcomes:
A short board-approved Consumer Duty framework, with the management information the board will review, is the clearest way to evidence this in the application.
Authorisation does not expire, but it carries continuing obligations. The firm must meet the threshold conditions at all times and keep the FCA informed.
UK firms lost EU passporting rights on 31 December 2020. FCA authorisation covers the UK only; to serve customers in the European Economic Area a firm needs authorisation in an EU member state, and other countries apply their own licensing rules.
The law allows 6 months for a complete application and 12 months for an incomplete one. The FCA targets 4 months for complete FSMA applications and 3 months for payment and e-money firms, and its median for new firms in Q1 2026/27 was 131 days.
Fees run from £280 to £225,170 depending on the pricing category. A small payment institution pays £1,130, an authorised e-money institution £5,640 and a complex consumer credit or cryptoasset business £11,260.
No. A firm must not carry on regulated activities until it is authorised, unless an exemption or exclusion applies, such as acting as an appointed representative of an authorised firm.
Authorisation grants permission to carry on regulated activities and brings the full set of FCA rules. Registration, used for small payment institutions and cryptoasset firms under the Money Laundering Regulations, covers a narrower scope with lighter requirements.
No. Authorisation belongs to the firm, so a buyer acquires the authorised company itself and needs FCA change of control approval before completion.
The FCA issues a Warning Notice, the firm can make written representations, and a Decision Notice can be referred to the Upper Tribunal. The fee is not refunded, and the firm can reapply once it has addressed the reasons.
No. Passporting ended on 31 December 2020, so a UK firm needs authorisation in an EU member state to serve customers in the European Economic Area.
Yes. A UK-incorporated firm must have its head office and registered office in the UK, and the head office must be where the directors and senior managers make day-to-day decisions.
Buckingham Capital Consulting has obtained FCA authorisations since 2013, including payment institution licences for Nexpay, Orbital and Global Send, e-money licences for Dzing Finance and Hryze, and a variation of permission for Moneliq. The firm prepares the full application, from the regulatory business plan and financial forecasts to the policies and key appointments, and manages the case officer's questions through to the decision.
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.