FCA APPLICATIONS: GETTING IT RIGHT FIRST TIME

The FCA recently announced its ambition to reduce the processing time for applications from six months to just four. This is welcome news if you’re keen to become authorised or vary your permissions.

If the regulator is to achieve its target, firms need to play their part. Put simply, the cleaner and more accurate you make your application, the smoother your journey to authorisation will be.

Helping firms through the FCA application process is one of our many roles and we know the submission can feel like a burden. Much of the work falls on directors who are already stretched, but as the adage goes, ‘fail to prepare, prepare to fail.’

Taking time to put together a well thought out, detailed application is far less painful than facing delays. In fact, a poor submission can extend the processing time from the standard six months to as much as a year. With that in mind, here’s our top tips for getting it right first time:

Start with a plan

Before you dive into your application, it pays to step back and create a plan of action. This is different to your business plan – although you’ll certainly need one of those. It is a practical roadmap for handling the submission itself.

Applications have a tendency to drift if they are not managed actively. Tasks pile up, directors become distracted with other work and time sensitive documents, like DBS checks, can expire quickly. Having a plan with clear timescales prevents this from happening, maintains momentum and keeps you in control of the process.

Authorisation applications require a large volume of supporting documentation, some of which is time sensitive. Without a structured approach, it’s all too easy to part-prepare something, set it aside and forget to add the finishing touches. From the FCA’s perspective, this looks sloppy and it isn’t the impression you want to give.

Your plan should cover:

• What you are trying to achieve: The type of permission you require will dictate what documents you need.
• When you want to be submitting your application: Your timeline will dictate when certain documents need to be produced.
• Who is responsible for each task: Assigning accountability ensures nothing slips through the cracks.

Recording outstanding tasks and monitoring progress regularly will help you stay on track, especially if the application takes longer than expected.

Building the application

It is now time to turn your attention to the application itself. There are a few key areas that deserve your focus:

• A robust business plan: A business plan must go beyond high-level strategy. The FCA will expect to see credible financial projections, detailed operational plans and a clear explanation of your systems and controls. If your plan mentions a particular control, you must be confident this will actually happen. The regulator is looking for evidence that your business model is sustainable and risks will be managed effectively.
• Accuracy and detail: When completing forms on Connect, accuracy is non-negotiable. Providing vague or incomplete answers only invites more questions – and delays! The FCA has published helpful guides for each form and built in an application checklist, which is a good way to confirm nothing has been overlooked.
• Supporting documentation: Every piece of supporting evidence must be correct, complete and current. Be mindful that some FCA forms have been updated recently. If your application takes longer than expected to prepare, double check you are using the latest versions. Submitting an outdated firm is a common and avoidable mistake.

The role of compliance consultants

In it’s recent Good and Poor Practise publications, the FCA advised firms not to become over reliant on compliance consultants. We can, and should, provide expert guidance, but ultimately, responsibility for an application lies with the firm.

If a consultant has helped prepare your submission, ensure you have read and understood the whole thing before sending it to the regulator. Directors, in particular, must be fully conversant with the business plan. Senior managers applying for the SMF16 function (compliance oversight) should be prepared to bring the plan to life during their FCA interview.

In practise, this means not only knowing what is written in the business plan, but also why it is there. If you have committed to specific systems and controls, be ready to explain how they will work. Circumstances may change, but the regulator will expect you to be clear and consistent in your intentions.

Why getting it right matters

The application process can feel overwhelming, but the benefits of careful preparation are clear. It will help you:

• Speed up the process by reducing the number of questions from the FCA.
• Build credibility by demonstrating you are organised and professional.
• Set your firm up for success with a clear and realistic business plan.

Ultimately, the time you invest upfront will pay dividends later. Rather than spending months dealing with queries or resubmitting documents, you can focus on running your business.

We assist firms regularly with a wide range of FCA applications. We’re happy to provide the support you need, whether that’s simply reviewing your documents before submission or providing guidance and assistance throughout the entire process. We understand what the regulator is looking for and how to present an application that will stand up to scrutiny.

If you’d like to discuss an FCA application or need help putting an action plan together, don’t hesitate to contact us on (0161) 521 8641 or email: info@b-compliant.co.uk