This page gives information about our performance in a range of areas, both statutory standards (as set by The Financial Services and Markets Act 2000 (FSMA) and other legislation) and voluntary commitments. It covers 60 service standards on activities including dealing with regulatory applications, telephone enquiries, and other correspondence.
We describe our commitments in 3 sections, each of which relates to our Mission:
- Open communication: We are committed to being as transparent as possible. It is important to provide appropriate information about our regulatory decisions, and be open and accessible to the firms we regulate as well as the general public. We reflect this by using standards, like the timeliness of our responses to consumers, firms, MPs and others.
- Enabling business: Our Approach to Authorisation gives more detail to support our Mission. We are committed to making it easier for firms and individuals to work with us through the authorisation process. We do this by adopting a service mindset in our approach to authorisation, ensuring our decision-making is adaptive, transparent, timely and consistent. This is reflected by standards in this document on how promptly we authorise firms and individuals.
- Adapting to changes: We respond to requests to vary the way firms work, for example by varying regulatory permissions. By responding in this way, it ensures firms maintain regulatory standards, and allows us to deal with requests from firms and individuals efficiently. How we respond is reflected by standards in this document e.g. on how quickly we process requests for variation of permission.
Standards for the work of the FCA’s Listing Transactions functions are listed at the end of this page.
- Key Findings
- Open communication
- Enabling business
- Adapting to changes
- Primary Market Oversight and Listing Transactions
- Some of the areas we have improved compared to last year are:
- Our response to ‘subject access’ requests improving from 87.7% to 95.9% which is now above our target of 90% (standard CM7.1)
- Our target to process a complete application for Part 4A permission improved from 96.7% to 99.4% (standard A1.1).
- Areas where some improvement is still required include how quickly we provide a substantive reply to MPs letters. Our target is to respond to 80% of these letters within 15 working days and 100% within 20 working days. During 2018, we received 294 letters and responded to 73.5% of these within the 15-day timescale however, in 2019 the number of letters received increased to 405 and the response rate dropped to 54.3% (standards CM5.1a). Similarly, our 20-day timescale also decreased from 98% in 2018 to 81.2% in 2019. As well as the volume of letters received a number of them were particularly complex and sensitive, this required a lot of additional attention and internal and external input. We are working to ensure our processes are able to meet this increased demand, within service standards, whilst maintaining the quality and rigour of our responses.
- Overall, compared to 2018 where we achieved our SLA targets on 50 of our standards (79.3%) this year we have achieved our SLA targets on 45 of our standards (75%).
As a public interest body, that aims to serve users of financial services, transparency is critical to how we operate. We communicate with firms and consumers in a variety of ways, with audiences ranging from MPs and firms, to consumers and the wider public.
Customer Contact Centre
Our Customer Contact Centre is our first point of interaction with firms and consumers, so it is important that we are available to provide online and telephone help when it is needed.
We aim to provide a prompt and high-quality service. If we cannot provide a conclusive response within our target timescale, we keep affected consumers and firms updated with our progress. We use customer satisfaction research to assess the quality of service.
Letters, emails, web forms, webchat or faxes
We aim to provide prompt answers to questions from firms or organisation’s that we regulate and consumers. These standards apply to correspondence that:
- requires a response
- is addressed to our Customer Contact Centre
- is from a regulated firm or organisation (or from its professional adviser where the firm or entity name is given), or a consumer
These standards do not include correspondence subject to statutory service standards. For example, requests for information under the General Data Protection Regulation 2018 (GDPR), the Freedom of Information Act 2000 or the Environmental Information Regulations 2004.
Graph 1 shows that we have provided a substantive response to firm’s email/web form/webchat correspondence within 2 working days (CM1.1b) 93.1% of the time and letter within 5 working days (CM1.1c) 91.9% of the time. These are both reporting as green as they are above our voluntary target of 90% however they have both reduced compared to 2018.
Graph 2 shows how we have provided a substantive response to correspondence received from consumers email/web form/webchat within 2 working days (CM2.1b) and letters within 5 working days (CM2.1c). Both CM2.1b (92.4%) and CM2.1c (94.9%) are above our voluntary target of 90%, however although CM2.1c increased by 0.7% CM2.1b decreased by 0.8%.
We monitor the performance of our telephone service by the number of calls that are ended before they are answered. This happens if no advisers are available to answer a call promptly or the caller decides to end the call rather than wait. We minimise the number of unanswered calls by predicting when the contact centre will be busiest and making staff available. Our standards measure how well we do this.
We aim for unanswered telephone calls directly to the Contact Centre to be no more than 5% (voluntary target) for both firms (CM2.3) and consumers (CM3.1). We have achieved this target (as shown in graph 3) this year for both firms and consumers and have reduced the number of unanswered calls from firms from 2% to 1.8% but unanswered calls from consumers increased from 1.6% to 2%.
We are frequently contacted by telephone so answering calls quickly is important. We have set a voluntary target to answer 80% of calls from consumers (CM2.4) and firms (CM3.2) within 20 seconds. Graph 4 that we have achieved this for both consumers and firms.
Calls directed via the switchboard and direct calls to others in the organisation are not subject to the above standards.
We offer our customers a post-call survey to measure our Customer Contact Centre’s performance. The standards below reflect our latest customer satisfaction score. We are reviewing our current service standards in line with our commitment to improve our service. We have set a voluntary target of 80% satisfaction for both telephony and correspondence. We have separated the standards for consumers (CS2.1) and firms (CS2.2).
Our correspondence satisfaction scores have improved following our work to ensure that our written communications are free of jargon and easy to understand. Our webchat channel is liked and consistently scored highly by consumers. Through our analysis of low scoring surveys and review of consumer feedback, we have identified areas for improvement which we anticipate will help us achieve the target in the future. These include increasing the availability of webchat and the promotion of its use, along with speaking with consumers on the phone, where possible, to discuss their query. Graph 5 shows the results from consumers.
Graph 6 shows that we have achieved the target for firms (88.9% telephony and 84.2% correspondence), however there is still room for improvement.
We are an independent financial regulator, accountable to the Treasury and Parliament. Every year we report to the Treasury on our progress through our Annual Report. The Treasury then submits a report to Parliament on our performance against our statutory objectives and how we have dealt with major regulatory cases.
We appear before Parliament’s Treasury Select Committee (TSC) in a general accountability hearing twice a year to scrutinise all aspects of our work. We also regularly give evidence to the TSC and other Parliamentary committees.
As part of our accountability to Parliament, we respond to requests for information from MPs and peers through letters, parliamentary questions and evidence to All Party Parliamentary groups.
We must give a full and prompt reply to any letter addressed to the FCA or any member of staff from Members of Parliament, Members of the House of Lords, Members of the Scottish Parliament, Welsh Assembly and Northern Ireland Assembly. These letters may be sent on behalf of a constituent or groups of constituents. As a public authority accountable to Parliament, it is important we respond professionally to such letters so we set ourselves target Service Level Agreements (SLA) for responding.
Our SLAs are paused if we have to seek more information externally, for example from a constituency office, a firm or to another organisation. So, the period it takes us to respond can be longer than the reported SLA.
We have set a voluntary target of 80% (CM5.1a) to provide a substantive reply to letters from MPs within 15 working days and a voluntary target of 100% (CM5.1b) to respond within 20 days.
We have had significant increase in the volume of letters this year, which has adversely affected our SLA performance (as shown in graph 7). We dealt with 405 letters (220 of which were replied to within the SLA) from Parliamentarians on behalf of their constituents this year compared to 294 last year. We are taking steps to address the delays caused by increased volumes and expect to see improvements over the next year.
We received a total of 405 letters and we replied to 329 within the SLA, as shown in graph 8. Several letters exceeded the 20 day SLA because they were particularly complex and sensitive. They required a lot of additional attention and internal and external input from numerous areas. If a letter takes longer or is likely to take longer than 20 days we inform the MP’s office.
Freedom of Information Act (FOIA) requests
The Freedom of Information Act provides a general right of access to all information held by a public authority, subject to relevant exemptions and other conditions.
We saw an unusually high number of FOIA requests (743 received in total, up 6.75%) within the period, resulting in our response rate dropping from 94.4% to 88.5% in 2018/2019 (as shown by graph 9), which is marginally below our target of 90%. Additional resource is being recruited to improve our future overall compliance rate.
Data Protection requests
Under the Data Protection Act 2018 individuals have a right to request access to any of their personal data which we hold (known as a subject access request).
Graph 10 shows the significant progress we have made this year in our response rate to subject access’ requests and we have improved from 87.7% in 2018 to 95.9% in 2019. This is despite the reduction in the permitted processing time from 40 days (Data Protection Act 1998) to 1 month (GDPR).
Our statutory target is to respond to 100% of requests within the set timeframe. However, the Information Commissioner has accepted that public bodies (including the FCA) may not be able to meet the statutory requirements in every case. So, we have set targets of 90% for both Freedom of Information Act requests and Data Protection requests (CM6.1 and CM7.1). These are in line with the Information Commissioner’s guidelines and expectations.
The Complaints Scheme was set up in April 2013 in line with the Financial Services Act 2012. It requires us to be able to investigate complaints made about alleged actions or inactions under the Act.
To ensure an accurate response, we may ask complainants for further written information. We may not be able start investigating until we receive this but we aim to resolve all complaints as quickly as possible. We will write to complainants regularly to keep them informed of progress.
Service Standards – Local area the complaint refers to should:
Service Standard 1 (SS1): complete an investigation and send a response to the complainant within 10 working days - Target – (voluntary) local area: 95% within 10 working days of receipt. Response to complainant should inform them of their right to ask for a Stage 1 investigation
Service Standard 2 (SS2): acknowledge a complaint within 5 working days of receipt – Target (voluntary) stage 1: 95% within 5 working days of receipt. As detailed in paragraph 6.1 of the scheme (the complainant should be provided with a leaflet explaining how the Complaints Scheme works).
Service Standard 3 (SS3): within 20 working days complete our investigation or provide a reasonable timescale to deal with complaint (See paragraph 6.4 of the Complaints Scheme) – Target – (voluntary) stage 1: 95% within 20 working days of receipt.
Graph 11 shows that we have continued to perform well in both Service Levels 1 and 2, although these have both dropped slightly compared to 2018. Service Level 3 is the only standard that didn’t achieve a Green performance this year. This result requires improvement. This was primarily because of a lack of resource and a focus on closing cases within 40 working days to the detriment of Service Standard 3. We did achieve the standard in 623 of the 720 cases. We have increased the size of the team by 50% and this will help us to complete tasks on time. We aim to move Service Standard Level 3 into a Green performance by the next reporting period.
Payment of suppliers
We aim to pay all valid, received invoices quickly, in line with industry best practice and have set a voluntary target of 90% to pay the correct invoices from within 30 days of receipt.
Graph 12 shows that we achieved 90.4% over the year, this was impacted by our office move to Stratford in the second half of 2018. The final quarter of the year saw an improvement to 93.2%.
We have set voluntary standards to ensure that we are monitoring the availability of our customer-facing Information Services (IS) systems. They are:
Ensure availability of customer facing IS systems – 98.5% within the times below
Ensure availability of the FCA register system (A public record of financial services firms, individuals and other bodies under our regulatory jurisdiction, as defined in FSMA.) – Mon-Fri, 7am-8pm
Ensure availability of the FCA website (Our website is our main digital channel for our consumer and firm audiences.) – 24 hours x 365 days
Ensure availability of the fee calculator (This enables firms to estimate their FCA fees, Financial Services Compensation Scheme (FSCS) levy and Financial Ombudsman Service (FOS) general levy for different financial periods and scenarios (either the consulted rates or the final rates for that period.) – Mon-Fri, 7am-8pm
Ensure availability of the GABRIEL (Gathering Better Regulatory Information Electronically) submission system (Our regulatory reporting system for collecting, validating and storing regulatory data.) – Mon-Fri, 8am-10pm
We have continued to perform well for this standard and have achieved the voluntary targets we have set, as shown in graph 13.
FSMA states that no individual or firm can legally carry out regulated activities unless authorised to do so or exempt. This is covered in the ‘general prohibition’ in section 19 of the Act. An individual or firm must apply to us for a ‘Part 4A permission’ to carry out those activities.
So, it is important that we authorise firms in a timely and efficient way.
We use authorisation to prevent harm. We do this by ensuring 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. We aim to prevent harm to consumers and stop threats to effective competition and to market integrity. For example, money laundering registration helps to prevent the harm to society caused by money laundering.
Authorisation application targets
Supplying the information requested on the application form will not necessarily be enough for the application to be ‘complete.’ An application is complete only when we have received all the required information and evidence.
We have a statutory target of 100% to process a complete application for Part 4A permission within 6 months of a complete application (s55v1) or within 12 months of an incomplete application (s55v2). Graph 14 shows that this year we have improved from 96.7% to 99.4%, however we still had 27 cases (out of a total of 4,340) miss the standard. Out of the 27 cases 21 were consumer credit related and these applications were legally or technically complex and therefore required significant engagement with the firms.
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 are fit and proper. This means that they have the honesty integrity, 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 target is to respond to 100% of applications within 3 months (R1.1a) unless it is attached to an application for part 4A permission. We also have a voluntary target of 85% to respond in 5 days for customer function and 10 days for Significant Influence Function (R1.1b).
Graphs 15 and 16 show that both standards saw a reduction compared to last year with R1.1a down from 100% to 99.9% and R1.1b down from 91.4% to 83.9%. This was due to a significant number of insurance firm related applications that were received before the start of the Senior Managers Regime for Insurers in December 2018 (over and above the expected conversion activity). Additionally, a small number of complex cases required significant interaction with sponsoring firms leading to delays in decisions. We received a total of 23,331 applications. For R1.1a we processed 23,318 within the standard and for R1.1b we processed 19,583 within the standard.
Money laundering registrations
Provisions for registration of ‘Annex 1 financial institutions’ under the Money Laundering Regulations 2017 state that, within 45 days of either:
- the date on which we receive a registration from an Annex 1 financial institution
- where the application is incomplete, the date on which we receive any further information
we must give the applicant notice:
- of our decision to register the applicant
- that we are minded not to register them, the reason for this and the right they have to make representations to us within a specified period (which may not be less than 28 days)
We have a statutory target (A1.2) of 100% to process Money Laundering registrations within 45 calendar days of receipt of an application or receipt of any further required information (Reg57(3) MLRs). We have achieved this standard every year for the last 3 years, as shown by graph 17.
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.
We have statutory (A2.1) and voluntary (A3.1) targets of 100% to process applications for the authorisation of new schemes under section 242 for AUTs and regulation 12 for OEICs and 261C for ACS.
Graph 18 shows that we have achieved 100% for the last 3 years for standard A2.1 which is to respond within 6 months of receiving a complete application or within 12 months of receiving an incomplete application.
We have achieved 100% for the last 2 years for standard A3.1, as shown by graph 19, which is to respond within 2 months of the receipt for Undertakings for Collective Investments in Transferable Securities (UCITS) and Non-UCITS Retail Schemes and within 1 month for QIS.
Mutual Society registrations
A mutual society is an organisation owned by its members and run for their benefit or for the benefit of the community. They include building societies, friendly societies, credit unions and registered societies. Registered societies include co-operative and community benefit societies, formerly known as ‘industrial and provident societies’.
Graph 20 shows that we achieved 92.3% against our voluntary target of 90% to process a complete registration application from a mutual society within 15 working days of receipt.
Payment Services Regulations and Electronic Money Regulations
UK firms providing payment services must apply to become either an ‘authorised’ payment institution or ‘registered’ as a small payment institution. This does not apply if it is already another type of payment service provider or is exempt. This is a requirement of the Payment Services Regulations 2009 (the PSRs).
UK firms that intend to issue electronic money (as defined in the Electronic Money Regulations (EMR) 2011 by way of business in the UK, must apply to become either:
- an ‘authorised’ electronic money institution
- ‘registered’ as a small electronic money institution
Further information on payment institutions and electronic money institutions
We have multiple standards for Payment Services (PS1 – PS8) and they each have their own statutory targets which are detailed below.
PS1 - To process a complete application for authorisation under the PSRs 2017 – Target (statutory) 100% within 3 months of the received date of a complete application or within 12 months of the received date of an incomplete application.
PS2 - To process a complete application for authorisation under the EMRs 2011 – Target (statutory) 100% within 3 months of the received date of a complete application or within 12 months of the received date of an incomplete application.
PS3 - To process a complete application for registration under the PSRs 20017 – Target (statutory) 100% within 3 months of the received date of a complete application or within 12 months of the received date of an incomplete application.
PS4 - To process a complete application for registration under the EMRs 2011 – Target (statutory) 100% within 3 months of the received date of a complete application or within 12 months of the received date of an incomplete application.
Variations of registration
PS5 - To process a complete application for a variation of registration under the PSRs 2017- Target (statutory) 100% within 3 months of the received date of a complete application or within 12 months of the received date of an incomplete application.
PS6 - To process a complete application for variation of registration under the EMRs 2011 – Target (statutory) 100% within 3 months of the received date of a complete application or within 12 months of the received date of an incomplete application.
Variations of authorisation
PS7 - To process a complete application for a variation of authorisation under the PSRs 2009 – Target (statutory) 100% within 3 months of the received date of a complete application or within 12 months of the received date of an incomplete application.
PS8 - To process a complete application for a variation of authorisation under the EMRs 2011- Target (statutory) 100% within 3 months of the received date of a complete application or within 12 months of the received date of an incomplete application.
Graph 21 shows that we did not achieve the target in PS1 and PS2 as adverse information in 3 (1 in PS1 and 2 in PS2) out of the 422 applications we received under PS1 and PS2 applications led to an enhanced assessment. To ensure the risk of harm was mitigated, the SLA was breached in each of these cases. Two cases were approved shortly after the statutory deadline and 1 application was withdrawn.
Graph 22 shows we have achieved the target for PS5 – PS8 for the last 3 years. We did not have any applications for PS6 and PS8 in 2017.
PSD2 introduced a statutory requirement of 2 months for processing 100% of notifications for UK agents of payment services firms. The 2 graphs below show our reporting against that standard (PS9) and, against our voluntary service standard (PS10) to process 85% of these notifications within 10 working days.
We did not achieve the statutory target for PS9 in 2019 as we were at 99.9%, as shown by graph 23. We received a total of 7,714 notifications and there was adverse information in 5 of these which led to enhanced assessment in mitigating risk of harm to consumers. Case assessment exceeded SLA in these instances.
Graph 24 shows that for 2018 and 2019 we achieved our voluntary target although it has reduced in 2019.
The decision to authorise a firm or individual is not a one-off. Firms and individuals may contact us to request changes to activities they are permitted to do. Our response to these requests should create public value by preventing harm. Standards in this section reflect how fast we have considered and responded to notifications and requests to vary permissions.
We must be informed in writing of any proposed changes to a trust, its trustee, or its manager (under s. 251 of FSMA). We need to be satisfied that any changes will not adversely affect a trust’s compliance with our requirements.
Alterations to a collective investment scheme (CIS)
We need to be satisfied, and informed in writing, that any proposed changes to certain features of an authorised OEIC (under regulation 21 of the Open-Ended Investment Companies Regulations 2001) will not adversely affect the OEIC's compliance with our requirements.
We must be informed in writing of any proposed changes to certain features of an authorised contractual scheme (under regulation 261Q of FSMA). We need to be satisfied that following any changes, the scheme will continue to comply with our requirements.
Overseas collective investment schemes which are not UCITS (Undertakings for Collective Investments in Transferable Securities) may be recognised as individual schemes if the individual schemes satisfy the requirements set out in section 272 of FSMA. So, it must inform us in writing of any proposed changes to an individually recognised overseas scheme (under s. 277 of FSMA).
Our standard practice is to acknowledge and give written approval wherever feasible. However, if we do not, then the proposal (under s. 251, 261Q and 277 of FSMA and regulation 21 of the OEIC regulations) gets automatic approval 1 month from the date we received notice.
Service Standard R2.1: to consider notice of proposed alteration to a collective investment scheme and, if appropriate, issue a warning notice.
We have a statutory requirement (R2.1) to consider notice of proposed alterations to a collective investment scheme, and if appropriate, issue a warning notice. As graph 25 above shows we have achieved the 100% target for each of the last 3 years.
Variation of permission
Firms may change the nature of their business and apply to add or remove any regulated activities, investment or customer types. They may also apply to add a requirement or limitation to, or remove a requirement or limitation from, the scope of their Part 4A permission.
We have a statutory requirement of 100% (R5.1) to process a complete application from an authorised firm for a variation of permission within 6 months of becoming complete (s55v(1)) or 12 months of receipt of an incomplete application (s55v(2)). We have made progress this year, as seen in graph 26, and have improved to 99.9% compared to 99.4% in 2018, however we had 3 (out of 2,050) cases miss the standard. Out of the 3 cases 2 were consumer credit related which were either had legally or technically complex issues, or where the firm withdrew after the statutory deadline had passed.
Cancellation of Part 4A permission
An authorised person with Part 4A permission can apply to us for their permission to be cancelled. Changes to individual regulated activities involve a variation of permission, whereas the cancellation of all permission means that the firm would no longer be permitted to carry on any FSMA-regulated activities in the UK.
We may refuse an application for cancellation if it potentially causes harm to consumers or potential consumers. This may be the case, for example, if a firm has outstanding customer complaints.
We have a statutory target of 100% to determine a complete application for cancellation of Part 4A permission within 6 months of becoming complete (s55v(1)) or 12 months of receipt of an incomplete application (s55v(2)). As graph 27 above shows we have achieved this target for the last 2 years.
An appointed representative is a firm or individual that an authorised person (a principal) has contracted to carry on regulated activities on its behalf. The principal is responsible for the appointed representative complying with FSMA and our rules. As such, we can process notifications by a principal of its appointed representatives relatively quickly.
Graph 28 shows how we have performed against our voluntary target of processing 95% of complete notifications for appointed representative status within 5 working days of the request. We processed the notifications within the 5 days 96.6% of the time which is above the target but down compared to last year’s 97%.
Post-event notification to change our static data on a regulated firm
‘Static data’ is basic information on firms that is essential to effective regulation. Static data must be kept up to date because it is used by us, the Financial Ombudsman Service, the Financial Services Compensation Scheme and Financial Services Register users.
When we process a complete ‘post event’ notification to change our firm details on a regulated firm (N2.1) we have set ourselves the voluntary target to process 95% of notifications within 5 working days of receipt. Graph 29 shows we have maintained our response rate of 99.9% this year as we did last year.
Pre-event notification to change our static data on a regulated firm
As with ‘post event’ notification we have also set ourselves the same target for ‘pre-event’ notifications. In each of the last 3 years we have achieved 100% for this standard, as shown by graph 30.
Under passporting rights, introduced by the European financial services directive , firms that are authorised to carry out regulated activities in another EEA member state are also entitled to carry on business in the UK. The directives covered within the passporting service standards N3.1, N3.2, N4.1, N5.1, R0.1 and R10.2 are those for which the FCA has responsibility for processing notifications. Markets in Financial Instruments Directive; Insurance Mediation Directive; Undertakings for Collective Investment in Transferable Securities Directive; Alternative Investment Fund Managers Directive; Mortgage Credit Directive; Payment Services Directive and E-Money Directive. To exercise this right, the directives require the firm to notify us, through its own home state regulator, of its intention to do business in the UK.
Graph 31 shows how we have performed against our statutory standards (N3.1 and N3.2). The target for both standards is 100% however each standard relates to slightly different requirements. Standard N3.1 relates to processing a notification from another competent authority in an EEA member state for one of its authorised firms to carry out business in the UK, under ‘freedom of establishment, within the timeframe set by the relevant directive within the relevant deadlines for each directive (Sch 3, 13). Standard N3.2 relates to processing a notification from another competent authority in an EEA member state for one of its authorised firms to carry out business in the UK, under ‘freedom of services’, within the timeframe set by the relevant directive and we are to process this within the relevant deadlines for each directive. We have achieved the target of 100% for both standards which is an improvement for both compared to last year.
We have 4 separate statutory standards (N4.1, N5.1, R10.1 and R10.2) in relation to ‘passporting out’ and these are all shown in the graph below.
Graph 32 shows how we have performed against standards N4.1, N5.1, R10.1 and R10.2. Standards N4.1 and N5.1 relate to processing notifications from an FCA-authorised firm to carry out business in another EEA member state. Standards R10.1 and R10. 2 relate to processing notifications of changes by an FCA-authorised firm already carrying out business in another EEA member state.
Standard N4.1 is to process a notification under ‘freedom of establishment,’ within the timeframe set by the relevant directive and our target is to do this 100% of the time within the relevant deadlines for each directive. We were not able to achieve this target this year due to adverse information in 2 out of the 124 notifications led to enhanced assessment to mitigate the risk of harm to consumers. Case assessment exceeded SLA in 2 instances.
Standard N5.1 is to process a notification under ‘freedom of services,’ within the timeframe set by the relevant directive and our target is to do this 100% of the time within the relevant deadlines for each directive. As with 2018 we achieved this target this year.
Standard R10.1 is to process a notification of changes under the ‘freedom of establishment’, within the timeframe set by the relevant directive and our target is to do this 100% of the time within the relevant deadlines for each directive. We were not able to achieve this target this year due to adverse information in 3 out of the 15,148 notifications led to enhanced assessment to mitigate the risk of harm to consumers. Case assessment exceeded SLA in 3 instances. However, this was a slight increase on our performance last year.
Standard R10.2 is to process a notification of changes under ‘freedom of services’, within the time frame set by the relevant directive and our target is to do this 100% of the time within the relevant deadlines for each directive. We were unable to achieve this target this as there were 3 cases, out of the 2,134 received, that missed the SLA due to an error by a case officer. We have addressed this through further training.
Notification of a proposed change in control
Controllers and firms must notify us before acquiring or increasing control (in line with part 12 of FSMA). A ‘controller’ refers broadly to a person who holds shares in or is entitled to exercise or control the exercise of, voting power or significant influence in a UK-authorised firm or a parent of a UK-authorised firm. The legislation allows us to object to the acquisition of or increase in control, or to approve with conditions. More information on control thresholds or bands and change in control requirements.
We have a statutory requirement to make a decision after receiving a ‘complete’ notification of a proposed change in control. Our target is to do this 100% of the time within 60 working days of acknowledgement of receipt (s189(1)). Graph 33 shows that we have achieved this target for the last 3 years.
The Listing Transactions (LT) Department encompasses our transaction review functions and the management of the Official List through our Listing Applications team.
An approved prospectus must be made available to the public before certain securities are offered to the public or admitted to trading on a regulated market in the UK. Where the UK is the home state in relation to the issuer, the FCA must approve the prospectus. Where an application for approval is made to the FCA, it must notify the applicant of its decision within the deadlines specified in FSMA. Unless the FCA requires further information, it must determine an application from a new issuer within 20 working days, and all other applications within 10 working days. We have put in place a system of voluntary targets for the FCA to provide comments on submissions in advance of the statutory deadlines. For new issuers, we aim to provide comments on the initial submissions within 10 working days if the document is submitted in substantially complete form.
We have set a voluntary target to comment on the initial proof of a document submitted for pre-vetting by a new applicant, or an unlisted issuer, undertaking a public offer and preparing a prospectus for the first time (L1.1). Our aim is to comment on submission within 10 working days 95% of time. We have achieved this target this year and have increased our response rate from 99.3% in 2018 to 99.5% in 2019, as shown in graph 34.
As well as standard L1.1 we have also set ourselves another voluntary standard (L1.2). This standard is to comment on the initial proof of a document submitted for pre-vetting by a listed issuer, or by an unlisted issuer, undertaking a public offer that has previously produced a prospectus. Our target is to comment on submissions within 5 working days 95% of time. This also covers documents submitted to the FCA for approval that do not fall under L1.1, (principally prospectuses and circulars issued by already listed companies), we aim to comment within 5 working days if the document is submitted in substantially complete form. Graph 35 shows that we achieved the response rate of 100% this year which is an increase on last year.
All documents requiring FCA approval before publication must be submitted in substantially complete form. We often review several proofs of these documents before approval. Our service standards regarding our comments on the initial proofs of such documents are shown as L1.1 and L1.2. We then aim to comment on subsequent proofs of these submissions within 3 or 5 working days, depending on the document.
As mentioned above we have set voluntary standards to comment on subsequent proofs of submissions. Standard L1.3a is within 5 working days from the day of receipt for comments on subsequent proofs of documents submitted for pre-vetting by a new applicant, or by an unlisted issuer, undertaking a public offer and preparing a prospectus for the first time. Our aim is to comment 95% of the time within 5 clear working days of receipt. Standard L1.3b is within 3 working days from the day of receipt for comments on subsequent proofs of documents submitted for pre-vetting by a listed issuer, or by an unlisted issuer, undertaking a public offer and that has previously produced a prospectus. Our aim is to comment 95% of the time within 3 clear working days of receipt. As graph 36 shows we have achieved both of this targets this year although they have both slightly decreased compared to 2018.
We sometimes give guidance on applying our rules. We respond to reasonable requests for guidance made by, or on behalf of, the named party required to comply with the applicable rule. We aim to provide either a substantive reply or a request for further substantive information within 5 working days.
- If the person submitting the document specifically agrees that a longer period is appropriate, compliance with the standards under L1 will not be affected.
- For L1.3, the FCA reserves the right to treat further drafts substantially redrafted or resubmitted only after long delays as initial submissions. In such cases, we will let the issuer or their advisers know as soon as practicable after the draft is submitted.
- The periods referred to in items L1, and L3 are business days and do not include the day we receive them.
- For initial submissions, the day of receipt ends at 4pm; we will treat documents received after this time as received the following day.
- Delays resulting from failure to comply with FCA processes will not affect compliance with the standards in L1, such as one (or more) of the following:
- outstanding document vetting fee
- significant eligibility concerns have not been addressed
- a draft document submitted is substantially incomplete
Our final standard L3.1 is also voluntary and is to provide a substantive reply to other queries received in writing, or provide a request for further substantive information. Our target is to provide this reply within 5 working days on 95% of queries. We achieved this target again this year but with a slight reduction compared to 2018 as shown by graph 37.