How Long Does it Take To Become FCA Authorised?

If you are offering advice or providing a product for consumer credit or financial services in the UK, it is likely that you will need to be FCA authorised. For a lot of firms this can be a set back when trying to launch and one of the main things delaying the company from getting up and running

Despite the various myths that it can take 3, 6 or 9 months to become authorised, we speak to compliance experts RQC Group who aim to shed some light on this.


A Background to FCA Authorisation

The FCA authorisation process is the often long and sometimes very thorough process to ensure that you are fit and proper to offer regulated activity within the UK’s compliance guidelines. 

Failing to be authorised can lead to hefty fines and even imprisonment so making sure that you do it thoroughly and properly is of paramount importance.

Industries that require FCA authorisation include, but are not limited to, personal loans, credit cards, insurance, dealing with investments, bonds, accepting deposited, secured loans and asset management.


Question 1 – Should I Complete FCA Authorisation Myself?

RQC Group: “It is possible to submit an application for FCA authorisation and there is a lot of guidance in terms of the documents, business plans and financial models that you need to submit. However, there is no indication of just how the FCA would like the application to be completed, because the regulator’s requirements change a lot over time and there are a lot of extras not included.”

“With the help of a consultant or lawyer, you may look at including multiple applications and this will allow you to cover lots of bases and avoid any delays or hold-ups from this being withdrawn.”


Question 2 – Is it True That it Only Takes 3 Months To Get FCA Authorised?

RQC Group: “If this is what you have been told, you are setting yourself up for disappointment! An FCA application takes up to 12 months to process and that has been the case since 2003, except for just after the credit crisis when applications were quickly turned around just 6 months later.”

“To understand how long it really takes, here is a breakdown:

  • Time required to draft a submission (pre-submission to the FCA): 2 ½ months
  • Time until appointment of FCA Case Officer, from date of submission: A further 1 month
  • Time until appointment of second FCA reviewer, from appointment of Case Officer: A further 4 ½ months
  • Time until Authorisation, from second FCA reviewer appointment date: A further 1 ½ months

So in reality, it’s likely to take on average just over 9 months”

Question 3: Is There Any Alternative to FCA Authorisation?

RQC Group: “Unfortunately not, if you are working in regulated activity, this requires a license and authorisation. There are financial products that do not require regulation such as contraction finance, invoice factoring and certain business loans. But if you work in assets or investments, FCA authorisation is obligatory.”

“There are alternatives to being fully authorised, since you can be ‘hosted’ under the umbrella of another licensed firm, known as ‘regulatory hosting’ or ‘umbrella hosting.’ This can take only 3 months to be approved and you simply have to pay a licensing fee or offer a percentage of revenue or profits, depending on the firm.”