For payment and e-money firms, FCA authorisation is more than a checklist: the application signals judgement, competence and regulatory readiness.
For payment and e-money applicants, the submission gives the FCA an early view of the
judgement, competence and regulatory seriousness of the firm and its people.
The application starts the regulatory relationship
A firm that is open from the outset starts building regulatory credit. A firm that makes the
FCA discover the problem starts by spending it.
Your submission and answers to FCA questions shape the regulator’s view. Be transparent.
Disclose difficult facts rather than forcing the case officer to extract the real position through
questions.
A limited outstanding dependency disclosed upfront, owned and given a plausible
completion date can demonstrate control. The same issue becomes a credibility problem
when the FCA discovers it first.
The BWRA can set expectations for the whole application
A weak BWRA is not just a financial crime problem. It can set the case officer’s expectation
for the rest of the application.
In one application we worked on, an FCA case officer explicitly said the business-wide risk
assessment gave them a very quick sense of how serious the people behind the application
were. It was not just about whether they understood financial crime risk. The quality of that
document can be an early indicator of the judgement and preparation behind the wider
application.
Financial crime obligations are extensively documented in legislation, FCA and JMLSG
guidance. If an applicant still submits a generic or weak BWRA, it is reasonable to assume
that the problem may not stop there.
If the thinking is weak where the regulatory expectations are clearest, there is little reason to
assume it becomes stronger where the judgement is harder.
Respect the gateway
Part of UK authorisation’s value comes from the scrutiny required to obtain it. Applicants
need to approach the gateway with the same seriousness. This is not a checklist exercise.
That starts with resourcing the business you are asking the FCA to authorise. You cannot
seek the credibility of a respected permission while budgeting for the project as though it
were an administrative filing. Lean is not the same as under-resourced. A lean model still
needs the people, systems and controls required to operate it properly.
It also has to be visible in the story the application tells. The business plan, financial
forecasts and operating model need to agree and make sense. Consistency is only the
baseline. Plausibility matters. Material claims need to be thought through, substantiated and
capable of surviving challenge.
What you submit does not only describe the business. Unrealistic assumptions or resources
that do not match the ambition can make the application look like a pack assembled to clear
the gateway, not a credible plan. Unsupported claims do more than weaken the application.
They tell the FCA something about the judgement of the people behind it.
Help the FCA understand your business model
Do not make the regulator reverse-engineer your business or reconstruct your perimeter
analysis for you.
For a novel, hybrid or unusual model, come with a reasoned perimeter position, supported
by specialist legal advice where the question is material or genuinely complex. The opinion
does not bind the FCA, but does more than help the FCA assess the model – it shows an
applicant that understands its complexity, has sought the right expertise and has come
prepared.
Respect the case officer’s time too. Make the submission easy to assess, with answers that
close the question rather than create three more. Use the regulator’s language, not internal
or commercial shorthand, and do not make the case officer hunt across multiple documents
to understand one point.
Be proactively curious about how the FCA will see the application and answer obvious
questions before the case officer has to ask. Avoidable back-and-forth is an easy way to
create your own delay.
Being helpful is itself a signal. It shows that the people behind the application understand the
requirements, the business, the regulatory questions and what they are asking the FCA to
authorise.
Choose your advisers wisely
A polished application can create a strong first impression. The next question is whether the
people behind it understand and own it. Where advisers have been used, that distinction
matters even more because, even with an excellent adviser, the FCA is ultimately looking at
the applicant.
Experienced case officers can spot when an application is not matched by the people
expected to own it. If the CFO cannot explain the forecast, the MLRO cannot explain the
BWRA or the directors cannot explain the risks associated with the business, the submission
quickly starts to look outsourced rather than owned.
A consultant can deliver an excellent pack but leave gaps in senior management’s
understanding. Choose advisers who educate as well as deliver. Producing the pack and
transferring the knowledge behind it are two different jobs. The right adviser leaves knowledge behind, not dependency.
Beyond the checklist
The application requirements tell firms what to submit. They do not determine what the FCA
will conclude about the firm behind the submission.
That conclusion comes from the quality of the thinking, the resources committed to the
model and the people explaining it. The application is where the firm shows the FCA what
kind of organisation it would be supervising.
Summary
You can submit every document the FCA asks for and still damage your application. Start
that relationship with regulatory credit by submitting a position that is credible, properly
supported and genuinely owned by management.
