Financial Services and Markets Act 2000 (FSMA) states that no individual or firm can legally carry on FSMA-regulated activities in the UK unless they are authorised by us to do so or exempt. An individual or firm must apply to us for a ‘Part 4A permission’ to carry on those activities.
We use authorisation to prevent harm. We do this by making sure that all authorised firms meet common sets of minimum standards at the start. We refer to these standards as the Threshold Conditions (the conditions).
We will only authorise firms where they meet the conditions and continue to do so. If they do not, we will not allow them to enter the relevant financial market.
Our performance continues to improve this year. In some complex cases, it is right that we take time for greater scrutiny and engagement with firms. To allow this our red, amber, green (RAG) status is set to report >98% as green for several metrics.
We publish quarterly operating service metrics[1] data for each authorisation category. The data shows the lower quartile, median and upper quartile of the range of calendar days taken for determination. Most applications are determined significantly ahead of the statutory deadline. Complete and comprehensive applications are likely to be determined in good time. We continue to see too many incomplete and poor-quality applications.
See our detailed guidance[2] for applicants in several sectors. We give examples of good practices and areas for improvement.
Contents
- Authorisation applications
- Approved persons status
- Money laundering registrations
- Authorised unit trusts (AUT), open-ended investment companies (OEIC) and authorised contractual schemes (ACS)
- Payment Services Regulations and Electronic Money Regulations
- Applications for agents to be included on the register
Chart tips: hover over the data series to view the data values and filter the data categories by clicking on the legend.
Authorisation applications
A firm supplying the information requested on the application form will not necessarily ’complete’ the application. An application is only complete when we have all the required information and evidence to make a decision.
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In most cases, we have a statutory requirement to process a complete application for Part 4A permission (new firm authorisation) within 6 months of receipt of a complete application or within 12 months of receipt of an incomplete application. A few cases may need extra time for greater scrutiny or engagement. For example, where required to meet our objectives effectively.
This year, we narrowly missed our 98% target by 1.4%. Most breaches were due to regulatory reasons. For example, cases held due to motor finance commission disclosure, waiting for information from courts and external intelligence agencies, and needing more time to determine the right outcome.
Approved persons status
A firm applying to carry on regulated activities must also apply under Part V of FSMA for approval of one or more individuals to perform the controlled functions on its behalf once authorised (its ‘approved persons’). We must be satisfied that approved persons have the honesty, integrity, good reputation, competence and capability and financial ability to perform their role and comply with the code of conduct in the Handbook.
Processing an application for ‘approved person’ status
Our statutory requirement is to determine approved person applications within 3 months unless it is attached to an application for part 4A permission.
We publish our performance against these metrics on a quarterly basis[3].
Money laundering registrations
The money laundering regulations[4] make us responsible for supervising the anti-money laundering controls of businesses that offer certain services.
We have a target of 98% to make a decision on registration applications for firms who want to carry on business in the UK as an Annex 1 financial institution. We are required to do so within 45 calendar days of receiving a complete application or any further required information.
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Graph A1.2 (for Annex 1 cases) shows that we achieved 99.2%, up from 96% last year. We have improved our case management process. Performance has improved over the year due to building capability.
From April 2024, we began reporting against our statutory requirement to process an application for registration under the fifth money-laundering directive (5MLD).
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For cryptoasset cases received and determined during the relevant period, 86.7% were determined within 3 months of receipt or within 3 months of when the application was considered complete.
The few cases determined outside of the service standard were aged cases, affected by both operational and regulatory factors. We have learned from these and improved our case management process to be more efficient for quicker determinations. However, we met 100% of our targets in June and July and from September 2024 to February 2025.
Authorised unit trusts (AUT), open-ended investment companies (OEIC) and authorised contractual schemes (ACS)
This covers all applications for us to authorise all types of UK-based collective investment schemes.
FSMA requires us to process applications for the authorisation of new schemes, other than UK undertakings for collective investment in transferable securities (UK UCITS), within 6 months of receiving a complete application or within 12 months of receiving an incomplete application. We are required to process applications for authorisation as a UK UCITS within 2 months.
In 2023 we approved the first Long-Term Asset Fund (LTAF), a category of open-ended authorised fund. These applications are not included in voluntary standards, but now we have experience of authorising these funds, we will be applying a voluntary 3-month standard for these applications. We will report on this in 2025/26.
Payment Services Regulations and Electronic Money Regulations
Firms that want to offer payment services in the UK must apply to become:
- an ‘authorised’ payment institution
- or ‘registered’ as a small payment institution
- or account information service provider
Unless they are already another type of payment service provider or exempt. This is a requirement of the Payment Services Regulations 2017 (the PSRs).
Firms want to issue electronic money in the UK, must apply to become:
- An ‘authorised’ electronic money institution.
- ‘Registered’ as a small electronic money institution, unless they are already another type of electronic money issuer. This is a requirement of the Electronic Money Regulations 2011 (the EMRs).
Find out more about electronic money and payment institutions[5]
We have multiple standards for Payment Services for the PSRs and EMRs, and they each have their own statutory requirements.
For the following application types, we have a target to process 100% of complete applications within 3 months of the received date or within 12 months of the received date of an incomplete application:
- PSRs and EMRs authorisation and registration applications
- PSRs and EMRs variations of authorisation and registration
We publish our performance against this metric on a quarterly basis[6].
Applications for agents to be included on the register
There is a statutory requirement of 2 months for processing 100% of applications for UK agents of payment services firms to be included on the register.
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Graph PS9 shows our performance in processing notifications for UK agents within 2 months has improved over the last 3 years, with 99% of cases determined within the agreed time in 2024/25.