In October 2022, the FCA issued an authorisations update. This update covers the regulator’s progress on service standards for firm authorisations case work, outlining any areas where it is not meeting its statutory and voluntary timelines for authorisations, and sets out its strategy for closing any gaps.
The key points identified are noted below.
• The number of firms not authorised in 2021/22 was 1 in 5, up from 1 in 14 in the previous financial year.
• Incomplete or poor quality applications are a particular issue for Money Laundering Registrations, Payments Services Regulations and Electronic Money Regulations applications.
• Most cryptoasset business’ applications are poor and the governance, systems and controls in place are inadequate.
• The FCA is reviewing its voluntary service metrics to determine whether they remain appropriate. For example, the service metric of five calendar days for Approved Person CF/SIF applications is no longer achievable considering the additional scrutiny now applied to these roles.
• The FCA is seeing a reduction in its pending caseload of around 47% since December 2021 and faster allocations to case officers.
• The FCA plans to recruit at least thirty more case officers into Authorisations in this financial year.
• Currently the FCA has a complex set of forms, which causes issues for users. The poor user experience means that the FCA receives too many incomplete forms, which delays assessment by case officers. It does not have good data validation or verification (i.e. automatic checking of the accuracy of data submitted by applicants). This affects the quality of data received, leading to inefficiencies. The contact centre receives many calls on how to complete the forms and the language in them can be difficult to understand. It can also be expensive and take a long time to update the current forms.
• The FCA is now able to progress work on digitising its forms, including data enrichment and validation to improve the application experience.
• A programme of work to upgrade and improve the FCA’s case management systems is underway. Authorisations will transition to a newer version of the current system, which provides a better user experience, in 2023.
• it is important that applicants understand the need to provide full and accurate information and take the authorisation process seriously. Recent experience in relation to firms seeking registration under 5MLD and funeral plan firms suggests that the FCA can do more to make sure firms understand what it means to be regulated before they apply, and where they do there are benefits for applicants and the FCA. The FCA has recently proven the success of an enhanced engagement approach through a pilot to support early and high-growth innovative firms.
If you’d like to know more about how we can help you with your FCA authorisation arrangements, or any other regulatory compliance issues, our specialist team is here to help.
Contact us today on 0207 436 0630 or email info@thistleinitiatives.co.uk.