FCA good & poor practice: Authorisation and registration applications

On 11 September 2025, the Financial Conduct Authority (the FCA) published good practice and areas for improvement on authorisation and registration applications. The guidance sets out examples of how firms can meet the FCA’s expectations in order to enhance their chances of a successful application and demonstrate their commitment to regulatory compliance and customer outcomes.

The FCA have structured the guidance into 3 categories: staff, policies and financial resources. Please see our analysis and the key practical takeaways for firms below.

The key takeaways are:

1. Demonstrate staff are skilled, experienced, and appropriately resourced.

2. Evidence understanding of regulatory obligations without over-relying on consultants.

3. Provide evidence of UK presence and staff eligibility.

4. Tailor policies to your business and ensure they are consistent.

5. Consider all customer scenarios, including vulnerable customers.

6. Provide clear and realistic IT plans.

7. Use FCA templates for financial information.

8. Submit accurate financial data, including historic accounts.

9. Provide evidence of funding and contingency plans.

It is reassuring to see the FCA document their expectations in these areas as they are aligned to the approach our Legal and Compliance teams take when supporting firms progress through applications for new permissions, variations of permissions and changes in control. If you’d like to talk about how our teams can help you meet the FCA’s expectations please contact us.

A) Firms have the staff with the appropriate skills, experience and capacity to provide the relevant financial service

Good practice

The FCA has identified several examples of good practice in this area, including:

• Suitability assessments: Firms providing their own suitability assessments for Approved Persons or Key Individuals, demonstrating how these individuals meet the necessary standards.
• Clear ownership structures: Providing clear ownership structure charts and identifying all relevant parties, which helps the FCA understand the firm’s ownership and governance structure.
• Addressing resource gaps: Recognising gaps in staff resources and presenting plans to address them, such as recruitment or upskilling existing staff.
• Rationale for staff Incentives: Explaining how staff incentives are designed to promote good customer outcomes rather than merely driving sales.

Areas for improvement

The FCA has also highlighted areas where firms often fall short:

• Over-reliance on compliance consultants: Firms must demonstrate their own understanding of regulatory obligations rather than relying solely on consultants.
• Time allocation for multiple roles: Smaller firms, in particular, need to explain how individuals with multiple responsibilities will allocate their time effectively.
• Eligibility and UK presence: Firms must evidence staff eligibility to work in the UK and demonstrate a meaningful commitment to operating in the UK.

Demonstrating to the FCA that staff are competent and firms are appropriately resourced is fundamental to delivering high-quality financial services and meeting regulatory expectations.

Key takeaways for firms

1 Demonstrate staff are skilled, experienced, and appropriately resourced.
2 Evidence understanding of regulatory obligations without over-relying on consultants.
3 Provide evidence of UK presence and staff eligibility.

B) Firms have robust policies in place that document their processes and procedures

Good practice

The FCA has observed the following good practices:

• Use of sample business plans: Using the details in the FCA’s sample business plan to ensure key information is included.
• Decision-making in the UK: Firms with overseas operations clearly demonstrating how decisions are made in the UK and how resources are allocated to the UK entity.
• Detailed analysis of permissions: Providing detailed analysis of how each permission applied for aligns with the firm’s intended activities, supported by legal advice or references to the FCA’s Perimeter Guidance Manual.
• Integration of Consumer Duty: Embedding the Consumer Duty into policies, procedures, and systems, rather than treating it as a standalone requirement.

Areas for improvement

Common shortcomings include:

• Generic policies: Firms failing to tailor policies to their specific business, making it unclear how they will be implemented.
• Customer scenarios: Not considering all likely customer scenarios, particularly for vulnerable customers, which can lead to poor outcomes.
• Repetition of rules: Merely repeating FCA rules without explaining how the firm will comply with them in practice.
• Misaligned policies: Policies that are inconsistent or unclear, often due to reliance on templates not designed for the specific firm.
• Unclear IT plans: Providing insufficient detail on planned IT systems, including timelines and project plans.

Robust and tailored policies are essential for ensuring that firms operate effectively, comply with regulations, and deliver good outcomes for customers.

Key takeaways for firms

1 Tailor policies to your business and ensure they are consistent.
2 Consider all customer scenarios, including vulnerable customers.
3 Provide clear and realistic IT plans.

C) Firms have the financial resources in place that are appropriate for the nature and scale of their business

Good practice

The FCA has highlighted the following good practices:

• Use of financial analysis templates: Firms using the FCA’s retail or wholesale financial analysis templates to present forecast information in a clear and understandable format.
• Supporting notes and assumptions: Providing detailed notes and assumptions to contextualise financial information.
• Evidence of funding arrangements: Submitting evidence of funding arrangements, including contingency plans, with smaller firms providing simpler evidence such as bank statements.

Areas for improvement

The FCA has identified several areas where firms need to improve:

• Historic financial accounts: Failing to submit historic financial accounts as part of the initial application, which delays the assessment process.
• Inaccurate information: Submitting inaccurate financial information, which hinders the FCA’s assessment and leads to additional information requests.
• Prudential requirements: Not providing sufficient information to verify that the firm meets prudential requirements.

Demonstrating adequate financial resources is critical for ensuring that firms can operate sustainably and meet their obligations to customers and regulators.

Key takeaways for firms

1 Use FCA templates for financial information.
2 Submit accurate financial data, including historic accounts.
3 Provide evidence of funding and contingency plans.