Ten Advantages of Pursuing FCA Authorisation (2024)

Embarking on a journey to secure full UK Financial Conduct Authority (FCA) authorisation is more than just a regulatory requirement. Wherever your starting point is - whether your business is launching from scratch, newly spun out of a larger investment manager, or an Appointed Representative looking to go solo - getting FCA authorised is a strategic move that can redefine your firm's trajectory in the UK financial services sector.

We outline ten reasons why getting FCA authorised can bring benefits beyond compliance, including enhanced credibility, market access, investor confidence, and long-term sustainability.

1. Credibility and Trust: Gain a mark of trust in the financial industry, signaling to clients, investors, and counterparties that your firm meets rigorous regulatory standards and is committed to ethical conduct. This can attract institutional investors, wealth managers, and other stakeholders who have to invest with authorised entities.
2. Legal Requirement: Getting FCA authorised is often a legal requirement for engaging in many financial activities in the UK. Conducting a regulated activity by way of business without proper approvals can result in significant penalties and legal repercussions, making compliance an essential prerequisite for businesses.
3. Market Access and Business Opportunities: Open doors to wider market accessas many institutions and investors dictate that they will only work with independently authorised entities. This can lead to increased business opportunities, partnerships, and client acquisition, enhancing your firm's growth potential.
4. M&A Advantage: Independently owned, operated, and regulated firms are strong targets in the M&A landscape. Their autonomy and compliance showcase stability, making them attractive to potential mergers or acquisitions. This strategic edge enhances the firm's value proposition, appealing to growth-focused investors and acquirers.
5. Access to EU Markets: Historically, getting FCA authorised provided access to the broader EU market through passporting rights. While Brexit has altered the landscape, FCA authorisation can still facilitate access to EU markets under certain conditions. With a robust UK/EU Memorandum of Understanding in place since 27 June 2023, UK firms commonly work alongside Luxembourg and Irish management companies to provide European-wide services and capital raising, providing valuable opportunities for expansion and diversification. Likewise, it gives incoming EEA firms who used to operate via a branch in the UK, stronger presence in the UK once authorised.
6. Adherence to Compliance Standards: Ensure that your firm adheres to strict, but world leading compliance standards set by the UK regulator. By meeting these standards, you can mitigate the risk of legal and regulatory issues, safeguarding your reputation and maintaining stakeholder trust.
7. Capital Raising Advantage: Gain a competitive edge in the marketplace by presenting a long-term proposition to investors, demonstrating an independently funded and operated corporate entity.
8. Risk Mitigation: Reduce regulatory and operational risks that emerge as your business grows by ensuring your firm operates within a regulated framework that creates a structure you can trust.
9. Commitment to Prudential Standards: Pursuing FCA authorisation demonstrates a commitment to robust prudential standards, showcasing the firm's financial security and risk mitigation efforts. By implementing detailed ICARA documentation and associated wind-down plans, the firm ensures preparedness for unforeseen circ*mstances, further enhancing its resilience and regulatory compliance.
10. Long-Term Sustainability: Getting FCA authorised demonstrates a firm's commitment to long-term sustainability and professionalism in the financial markets. By investing in regulatory compliance and governance, firms can build a solid foundation for growth, resilience, and success in the industry.

How we help

With over 20 years of experience, our group of specialists has a deep understanding of securing regulatory approvals.

We can work with you to draft a detailed FCA application pack and, where relevant, meet with the regulator before the formal submission of application material. We provide guidance on regulatory expectations, licence type, and will draft technical and pragmatic responses to address the regulator’s due diligence throughout the process.

Once authorised, we can further support you with our broad range of advisory, managed services, and regulatory technology solutions, to help you grow and protect your business, while also addressing your ongoing compliance, environmental, social, and governance (ESG), investment performance, and cybersecurity challenges.

Connect with us to speak to a member of our FCA authorisation team. They are on hand to outline how we can manage the process and requirements before, during, and after the application, helping you avoid any necessary complications and delays.

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