Transaction services – Authorisations

Launching a regulated business and product

At Sicsic Advisory, we have worked with a lot of businesses, but we have yet to meet a firm that set out with the ambition to become authorised and regulated.

 

However, if you want to sell financial products, achieving regulatory approval is likely to be a pre-requisite – a critical gateway on your business journey, at which you must demonstrate you are ‘ready, willing, and organised’ to comply with the regulator’s current rules and guidance on an ongoing basis, and any new rules they introduce in the future.

 

Submitting a good quality authorisation application is, therefore, essential, but it’s really just the first stage of your journey. The work you do to create your regulatory application should give you the confidence to know your business has strong, reliable foundations. A lot of this holds true, not just when you start a new business, but also when you acquire an existing business or want to engage in new regulated activities.

One size doesn’t fit all

In our experience, many consultancies have a standard approach to authorisation projects and focus on the firm’s achievement of regulatory approval.

 

At Sicsic Advisory, we don’t see ‘getting authorised’ as the end point and, while we agree a structured approach supports successful delivery, taking the same approach for all firms doesn’t acknowledge either the critical differences between firms’ business objectives, or the fact that no two firms are in the same position in terms of their readiness, willingness or organisation.

 

Your needs will depend on your longer-term business objectives which create the need for regulatory authorisation, and the maturity of your firm and experience of your team. So, although regulatory requirements will be alike for similar businesses, each firm’s starting point and destination will be different. Your journey, from now to becoming authorised and regulated and beyond, is unique and the path you take needs to be right for you.

Top 5 mistakes applying for authorisation

In the FCA’s Annual Report and Accounts for 2022/2023, they highlighted they now don’t authorise 1 in 4 applicant firms. So it’s important to invest time and resource into getting your application right and to avoid the mistakes we commonly see being made by firms going through the regulatory authorisation process, for example:

Boiler plate business plans

The regulators are quite clear on what they expect to be covered in the business plan, but you need to ensure it really tells the story of your business.  There is no value in generic content that could have been written about any firm. The regulators want to know about your business, and they want you to demonstrate that you know your business and that you understand what they are looking for.

Coming across as a sales pitch

The regulators aren’t investing in your business. Although they understand you will be looking to make a profit, and they want to see you have a sustainable business, they want to understand the mechanics underneath and to know that your profit-making doesn’t come at the expense of your customers or the regulator’s own objectives.

Assuming the regulator has prior knowledge

The regulator receives many applications. You shouldn’t assume the person reading your application has prior, intimate knowledge of your business or sector. It’s important to pre-empt what the regulator might ask – if they decide your submission is ‘incomplete’ they can take up to twelve months to process your application.

Not preparing the individuals

During the application process, the regulators may want to meet and/or interview key individuals from your firm. Conversations, however informal they may seem, should never be taken lightly. Prepare the individuals to work for a regulated firm – not just for the authorisation process.

Not fully understanding your business model and impact on FCA and/or PRA objectives

The regulators are expert at identifying risks presented by business models. Yours will need to be robustly challenged before you submit it to the regulator. You must be prepared to talk about how it is constructed, the risks it presents to the sustainability of your business, to your customers and to the regulator’s own objectives.

How can Sicsic Advisory help?

If you are embarking on a new regulatory venture, whether as a start-up, development of an existing business, or as a result of acquisition, Sicsic Advisory can help you by:

 

  • Setting out options to help you decide the right model for your business.
  • Identifying what you need to do to set up your business in a way that meets your needs, as well as those of the regulators, including the capability and resources you will need for set-up and beyond.
  • Setting up your project for successful delivery – ensuring the effort is scaled and calibrated to the needs of your future business model.
  • Providing expertise to navigate regulatory processes and help to create a constructive relationship with regulators.
  • Supporting the implementation of your business and operational models in accordance with your needs.

Get in touch

If you’d like to know more about how we can support your authorisation process, please get in touch.