This page gives information about the timeliness of our service standards in a range of areas. For transparency we report on both internal and statutory standards, as set by The Financial Services and Markets Act 2000 (FSMA).
We also report on requirements under other legislation, including the Freedom of Information Act, the Payment Services Regulations and Electronic Money Regulations. It covers 60 service standards on activities including dealing with regulatory applications, telephone enquiries and other correspondence. This data focuses on our performance for the period 1 April 2020 to 30 March 2021. Our Annual Report provides further information about our performance and what we have achieved during 2020/21.
Our Business Plan also describes how we will have a greater focus on measurement to drive accountability and improvements in our operational effectiveness. We will review our service standards measures as part of our transformation to ensure we continue to measure and report on the key areas of our service.
We describe our commitments in 3 sections:
- 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 consumers. We reflect this by using standards, like the timeliness of our responses to consumers, firms, MPs and others.
- Enabling business Firms that apply for authorisation at our gateway need to meet our standards. We need to be rigorous with firms when they apply; if we do authorise them, we need to know what they are using their authorisation for. The standards below capture how promptly we authorise firms and individuals.
- Regulating existing businesses We respond to requests to vary the way firms work, for example, where appropriate, by varying regulatory permissions. Responding in this way ensures firms maintain rigorous regulatory standards and allows us to deal with requests from firms and individuals efficiently. How we respond is reflected by standards on this page eg how quickly we process requests for variation of permission.
Standards for the work of our Listing Transactions functions are listed at the end of the page.
The pandemic has created a number of operational challenges; however, we have changed some of our processes to help meet our service standards. We have activated contingency and business continuity measures so staff can provide a high level of service while working remotely. Examples of some of the changes we have made include:
- accelerated payment of all approved supplier invoices
- improved our remote working IT capabilities to continue to protect consumers, and ensure that financial markets work well and ensure firms can access our systems
- encouraged consumers and firms to contact us via email to reduce the volume of telephone calls
1. Key Findings
Overall, we achieved our SLA targets on 33 of our standards (55%) this year. We have, however, seen an increase in the number of standards reporting below our minimum targets. In 2019/20 we had 7 (11.7%) standards reporting below our minimum targets compared to 15 (25%) in 2020/21. Our focus for the coming year will be to reduce the number of standards that have fallen below the minimum targets.
Some of the areas we have improved compared to last year are:
- responding to 99.3% of letters from firms within 5 working days, compared to 98.7% in 2019/20
- a further increase in accelerated payments of all approved supplier invoices, up to 98.5% from 95.5% in 2019/20
- the processing of Money Laundering registrations within 45 calendar days of receiving an application is on the increase, from 80.9% in 2019/20 to 96.4% in 2020/21
Areas where we still need to improve are:
- The response rate for substantive replies to MP letters -our target is to respond to 80% of these letters within 15 working days and 100% within 20 working days. During 2019/20, our response rate within the 15-day timescale was 49.7%, dropping to 28.4% in 2020/21, this was due to the increase in the number of letters received.
- The response rate when completing an investigation into a complaint – the time taken to respond to complaints has reduced further this year due to an increase in the volume of incoming complaints. More information about the themes and trends relating to complaints will be covered in our response to the Complaints Commissioner’s Annual Report, due to be published in July 2021.
- Processing an application for ‘approved person’ status - while the volume of CF and SIF applications has reduced following the start of the Senior Managers & Certification Regime (SM&CR) for solo-regulated firms in late 2019, prior to SM&CR we received a very large number of solo-regulated firm applications for Senior Manager Functions (SMFs) under SMCR. This was well above the expected level of conversion activity and as a result, the proportion of cases processed within deadline fell from 83.9% in 2019 to 56.6% this year, below our voluntary target of 85%.
- Processing complete notifications for appointed representative status - we saw another decline within target this year, dropping from 84.2% in 2020 to 48.1%. This was affected by resource stretch, driven by the significant number of solo regulated firm-related applications we received in December 2019, due to the introduction of the SM&CR for such firms.
2. Open communication
As a public body, 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.
2.1. Supervision Hub
Our Supervision Hub is our first point of interaction with firms and consumers, and includes dedicated consumer and firm helplines as well as providing email and online communication channels. We are committed to providing online and telephone support when it is needed. We regularly review the queries we receive and update our website to encourage and allow firms and consumers to self-serve where they can.
Over the last 12 months, as we have continued home working due to the pandemic, the Supervision Hub has remained open, operating to normal opening hours. During this period we had 4 incidents that resulted in temporary telephone line closures for a total of 9.75 hours.
As the pandemic unfolded, pressure started building on our ability to maintain a 48-hour turnaround on all consumer correspondence. An increase in demand through this channel coincided with a drop in resource capacity driven by coronavirus related staff absence.
In May, telephony demand returned to near normal volumes from both firms and consumers. As our resource capacity remained between 10 and 20% below normal levels, this put pressure on telephony SLA’s, which started running just below target. The second half of the year saw several regulatory and system changes impacting firms which further increased the contact volume and the pressure on the telephony SLA.
The experience for individuals trying to contact us was slightly longer wait times at some intervals through the day. Despite this customer satisfaction scores remain high and above target for the year.
To enable us to meet our service standards this year we have adapted our recruitment and support strategies, this will provide us with improved flexibility to manage continuing Covid related impacts. In the second half of this year, we anticipate that contact volumes should return to more usual levels, as firms become more familiar with new FCA systems and recent regulatory change, allowing a return to standard service across all contact channels.
Letters, emails, web forms and webchat
We aim to provide prompt answers to questions received: 2 working days for emails, web forms and webchats and 5 working days for letters. These standards apply to correspondence that:
- requires a response
- is addressed to our Supervision Hub
- 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 UK General Data Protection Regulation (UK GDPR), the Freedom of Information Act 2000 or the Environmental Information Regulations 2004.
Graph 1 shows that we have provided a substantive response to firms’ email/web form/webchat correspondence within 2 working days 94.5% of the time. For letters, this has been within 5 working days 99.3% of the time. These are both above our voluntary target of 90%.
Graph 2 shows how we have performed against our standard to provide a substantive response to consumer correspondence from email/web form/webchat within 2 working days and letters within 5 working days.
The helpline has continued to provide a stable service operating normal hours despite the move to homeworking. Firms and consumers were initially signposted to contact us via email rather than telephone increasing the typical monthly volume by 50%. During the first 6 months, we were able to respond to 89% of these contacts within 2 business days.
The second half of the period saw an even bigger jump in volume with monthly queries finishing 79% higher than the same time last year, most of this increase being driven by contact to do with potential scams. Volumes for the year finished 72% higher than the previous and we were able to respond to 80.4% of queries within the 2-working day voluntary target. Letters (93.8%) finished above our voluntary target of 90%, with results similar to 2019/20.
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 we will be busiest and making staff available. Our standards measure how well we do this.
We aim for no more than 5% of unanswered telephone calls for both firms and consumers. This is a voluntary target. We have achieved this target (as shown in graph 3) this year for consumers but have missed this target for firms.
Contact volumes for the firm helpline over the course of the year finished 10% higher than the previous year with most of this increase received from November 2020 onwards.
There are several reasons for this increase including:
- a substantial system change as firms began the migration from the Gabriel reporting system to the new RegData system
- a regulatory change for many firms with the registration of Directory Persons
- 23,000 regulated firms were asked to complete our Financial Resilience survey
Due to the relatively short-term nature of these contact peaks, we were unable to resource to these levels and the voluntary service standard was missed finishing at 5.1%.
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 and firms within 20 seconds. Graph 4 shows that we missed this target for both groups.
The service standard for the first 6 months was achieved but as telephony volumes increased and staffing levels continued to be impacted by coronavirus, the voluntary service standard for the year was missed 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 performance. This survey gives consumers and firms an opportunity to rate the expertise of our associates, the overall service received and leave additional comments. Firms can also rate the overall ease of use of dealing with us and its systems and consumers can state how well they have understood their next steps based on our guidance. The standards below reflect our latest customer satisfaction score. We have set a voluntary target of 80% satisfaction for both telephony and correspondence.
Our satisfaction scores have stayed relatively consistent following our work to ensure that our written communications are free of jargon and easy to understand but our failure to respond to consumers email correspondence within our voluntary 2 days SLA has had an impact on those scores which narrowly missed the 80% target.
Graph 6 shows that we have achieved the target for firms (84% telephony and 80% correspondence).
2.2. MPs’ letters
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 us 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 provide a considered response to these letters, so we set ourselves target Service Level Agreements (SLA) for responding.
Our SLAs are paused if we must seek more information externally, for example from a constituency office, a firm or another organisation. The period it takes us to respond, therefore, can be longer than the reported SLA.
We have set a voluntary target of 80% to provide a substantive reply to letters from MPs within 15 working days and a voluntary target of 100% to respond within 20 days.
We had a significant proportion of letters exceeding the 20-day SLA, as shown in graph 8. These letters were usually particularly complex and sensitive and required considerable additional attention and internal and external input from a number of areas. Where a letter takes longer or is likely to take longer than 20 days, we always inform the Parliamentarian’s office.
Missing our SLAs was due, in part, to a 59% increase in the volume of letters received (768 in 2020/21 compared to 484 in 2019/20). Members of the MPs’ Letters team were required to take long-term leave of absence due to the pandemic. Additionally, our response to the pandemic meant that teams across the organisation were stretched and unable to meet their local SLAs for drafting and approval of letters. This combination of factors underlies us missing targets across the year. A new process for drafting and approving responses to MPs’ Letters has been put in place. We anticipate that this process, coupled with reduced levels of correspondence will bring our 2021/22 SLAs in line with pre-pandemic levels.
2.3. Freedom of Information Act (FOIA) requests
FOIA provides a general right of access to all information held by a public authority, subject to relevant exemptions and other conditions.
The trend for increasing volumes of FOIA requests continued through 2020/21, with 926 requests received - up 15% on the previous year’s total.
Performance for April 2020 to March 2021 was at 63% with 535 of the 849 requests completed within the statutory timeframes within 20 working days. Our target is 90%. We recognise this is below the standards we expect of ourselves and have put a programme in place to drive improvement, this includes additional staff, technology improvements and process simplification. We expect to meet our target service standard later this year.
As part of our ongoing process improvement work, we reviewed our application of FOIA extensions against Information Commissioner Office (ICO) guidance and have identified cases where the extension may have been incorrectly applied. Consequently, we have restated the data for the previous 2 years. For some of these historical cases our investigation has been inconclusive, therefore we have provided a range, ranging from the lowest performance (assuming all inconclusive cases missed the service standard) to best performance (assuming all inconclusive cases met the service standard).
For 2018/19 our performance was between 70% and 80% and in 2019/20 it was between 65% and 78%.
2.4. Data Protection requests
Under the UK General Data Protection Regulation (GDPR) and 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.
The UK GDPR sets a timeframe of 1 month for responding to subject access requests, this can be extended to 2 months for more complex requests. The Information Commissioner, however, has accepted that public bodies, including us, may not be able to meet the statutory requirements in every case. We operate to a target of 90% for Data Protection requests completed within this timeframe.
In 2020/21 we responded to 63% of requests within the target timeframe. The pandemic and prolonged dispersed working has had a substantial impact on our performance and highlighted some limitations with our processes and technology. To address these issues, we have put a programme in place to drive improvement, including additional staff, external paralegal support, technology improvements and process simplification. We expect to meet our target service standard later this year.
Under the Financial Services Act 2012, we are required to maintain a Complaints Scheme for the investigation of complaints arising in connection with the exercise of, or failure to exercise any of our relevant functions. The statutory requirements include that the Complaints Scheme must be designed so that complaints are investigated quickly as far as practicable.
Our service standards for responding to complaints are:
Acknowledgement: acknowledge a complaint within 5 business days of receipt. Our voluntary target is that 95% of complainants should receive an acknowledgement within 5 business days of receipt.
Completion (complaints dealt with by the local business area): complete an investigation and send a decision to the complainant within 10 working days. Our voluntary target is that 95% of complainants should receive a decision within 10 working days of receipt. The response to the complainant should also inform them of their right to ask for a Stage 1 investigation.
Completion (complaints dealt with by the central complaints team): complete an investigation or provide the complainant with a reasonable timescale to investigate the complaint within four weeks of receipt. Our voluntary target is that we should achieve this for 95% of Stage 1 complaints.
Following a system upgrade and data migration exercise undertaken in March 2021 as part of our complaints transformation programme we identified a subset of complaints that had inadvertently not been included in our historic Service Standards reporting. Consequently, graph 11 also restates the data for the previous 2 years.
There has been a reduction in compliance over recent years due to:
- an increasing trend of incoming complaints, rising from 557 in 2017/18 to 1,596 in 2020/21
- large volumes of complaints where the allegations made were unclear, requiring clarification from the complainant to determine whether it is an eligible complaint
- significant increases in the numbers of complaints where investigation has been deferred because investigating the complaint now could be prejudicial to ongoing regulatory action
- significant volumes of complaints received in short time periods due to specific events, e.g. over 600 new complaints received during August and September 2020 connected to the publication of the Complaints Scheme consultation
The transformation of the Complaints function, which has been underway over the last 12 months, has resulted in significant increases in team resources and substantial improvements in our systems and processes to help ensure we improve the service provided to complainants. We have achieved considerable progress in reducing the delays in complaints handling, and we expect to demonstrate improved performance against these standards during 2021/22.
2.6. Payment of suppliers
We aim to pay all valid, received invoices quickly, in line with industry best practice. We have set a voluntary target to pay 90% of valid invoices within 30 days of receipt. In response to coronavirus we are aiming to accelerate payment of all approved supplier invoices in our weekly payment cycle, regardless of the actual supplier terms.
Graph 12 shows that we achieved 98.5% over the year, an improvement compared to the previous 3 years.
2.7. FCA systems
We have set voluntary standards to ensure that we are monitoring the availability of our external facing Information Services (IS) systems.
Standard: Ensure availability of external facing IS systems – 98.5% within the times below
The systems are:
The Financial Services Register
A public record of financial services firms, individuals and other bodies under our regulatory jurisdiction, as defined in FSMA.
Standard: Ensure availability of the FS register system – Mon-Fri, 7am-8pm
Our website is our main digital channel for our consumer and firm audiences.
Standard: Ensure availability of the FCA website – 24 hours x 365 days
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).
Standard: Ensure availability of the fee calculator – Mon-Fri, 7am-8pm
GABRIEL (Gathering Better Regulatory Information Electronically) submission system
Our regulatory reporting system for collecting, validating and storing regulatory data.
Standard: Ensure availability of the GABRIEL system – Mon-Fri, 8am-10pm
Graph 13 shows we achieved our target again this year.
GABRIEL: In May and July 2020, we experienced 2 separate problems with supporting data storage systems.
In January 2021 we experienced a drop in performance of the Financial Services Register system. This occurred because of internet and system connectivity problems.
In February 2021, The Financial Services Register was unavailable for 3.55 hours, due to a security incident.
In all circumstances reviews have been carried out to understand the root causes, and actions implemented to avoid recurrence.
Due to the coronavirus restrictions, our IT department and 3rd party suppliers maintained service standards throughout by moving to remote working. Our remote working facilities have enabled us to continue to protect consumers, ensure that financial markets work well and to ensure our systems were highly available for firms and consumers to access.
3. Enabling business & preventing harm
FSMA states that no individual or firm can legally carry out FSMA-regulated activities in the UK unless they are authorised by the FCA to do so or exempt. This is the so-called ‘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.
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 recognise that in some areas, we have not met our service standards. We are committed to improving our performance against these standards. We are recruiting additional staff in areas of key pressure to increase the pace that we can allocate and determine applications. In the longer term, as part of transforming the FCA, we are looking at how we can make decisions faster. This includes making sure that we receive complete applications on submission and through opportunities to automate our processes.
3.2. Approved persons status
Processing an application for ‘approved person’ status
Our statutory requirement is to respond to 100% of applications within 3 months, 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 CF and 10 days for SIF. As of 9 December 2019, and the commencement of the SM&CR for solo-regulated firms, these functions now only apply to Appointed Representatives (ARs) and pure Benchmark Administrators.
Graphs 15 and 16 show that both standards saw a reduction compared to the previous year. Down from 96.9% to 85.7% and from 56.6% to 19% respectively. This was due to very high volumes of solo-regulated firm applications received in the period prior to commencement of SM&CR for solo-regulated firms and in the months following. These applications were received within a short timeframe and the volume of applications received during this period was significantly above the expected level. This has impacted performance against these standards during the year. Additionally, a small proportion required significant interaction with sponsoring firms which led to delays in decisions. We received a total of 12,672 applications. We assessed 10,860 within the 3-month statutory timeframe (graph 15) and 2,413 within the voluntary standard (shown in graph 16). Recruitment is underway to bring in additional resources which should contribute to an increase in the volume of applications responded to within these timeframes. We expect to be meeting the statutory and voluntary target for these standards within the current financial year 2021/22.
3.3. Money laundering registrations
Provisions relating to the assessment period for registering Annex 1 financial under the Money Laundering, Terrorist Financing and Transfer of Funds (Information of the Payer) Regulations 2017 (MLRs) broadly sets out that, within 45 days of either (1) the date on which we receive an application for registration from an Annex 1 financial institution, or (2) 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 to make representations to us within a specified period (which may not be less than 28 days)
We have a statutory requirement of 100% to process 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 an application or any further required information (Reg59(3) MLRs). Graph 17 shows that, while performance against this standard has improved this year, we still haven’t met the 100% target. This is due to a combination of system issues impacting the receipt of applications and operational issues experienced in Q4 2020/21 following an increase in the number of applications received. To resolve these issues, we have assigned resource to manage the allocation of Annex 1 applications, separate from the other applications we handle as a team to ensure they are allocated in a timely manner. We are increasing resource in the team and aim to be back on track by Q3 2021/22. Our ongoing transformation work will also support us to meet this standard in the long-term with the potential for modest improvements in efficiency being realised during the current financial year.
3.5. 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’.
We have a voluntary target to process a complete registration application from a mutual society within 15 working days of receipt. Graph 20 shows that we achieved 76.1% against our voluntary target of 90%, a decrease compared to the previous year. Year-on-year registration volumes are comparable overall. The flow of applications did vary significantly from previous years with spikes in applications over the second half of the year. For example, the last quarter of the 2020 calendar year saw a 59% increase in rule amendment applications compared to the same period in 2019. One driver for this was that societies were making use of provisions of the Corporate Insolvency and Governance Act 2020 to hold virtual meetings to amend their rules. During these peak periods of demand more were processed beyond the SLA. It should be noted that there is no significant backlog of applications.
During the year we also saw increases in email enquiries from societies compared to last year. This was particularly driven by questions in relation to coronavirus. We felt it was important to provide responses in a timely manner so directed some resources from processing applications to support this. Recruitment is underway to bring in additional resources which should contribute to an increase in the volume of applications responded to within the voluntary target. We expect to be meeting this target within the current financial year 2021/22. Our ongoing transformation work will also support us to meet this standard in the long-term with the potential for modest improvements in efficiency being realised during the current financial year.
3.6. 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 2017 (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
We have multiple standards for Payment Services for PSRs and EMRs, and they each have their own statutory requirements as follows:
PSR and EMR authorisation applications
To process a complete application for authorisation under PSRs and EMRs - target is 100% within 3 months of the received date of a complete application or within 12 months of the received date of an incomplete application.
PSR and EMR registration applications
To process a complete application for registration under PSRs and EMRs - target is 100% within 3 months of the received date of a complete application or within 12 months of the received date of an incomplete application.
PSR and EMR variations of registration
To process a complete application for a variation of registration under PSRs and EMRs - target is 100% within 3 months of the received date of a complete application or within 12 months of the received date of an incomplete application.
PSR and EMR variations of authorisation
To process a complete application for a variation of authorisation under PSRs and EMRs - target is 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 we did not meet the deadline for the registration or authorisation of firms under the EMRs and PSRs. This was due to a combination of reasons, most notably extra time required by firms who were struggling to provide the required supporting documentation (from external parties) due to delays caused by the global pandemic. We have also seen continued delays where we have been unable to carry out a proper assessment in the time available, for example, due to the complex nature of business models, including firms that offer a combination of regulated and unregulated products.
Throughout the year, we have seen an increased demand for authorisation or registration, with demand for authorisation under the EMRs growing by c70%. Unfortunately, the quality of application received is typically poor and we are seeing fewer successful applications. In Q4 2020/21, just 35 of 90 completed assessments resulted in a firm receiving registration or authorisation.
Recruitment is currently underway to bring in additional resources, which should improve the speed at which we are able to determine applications. Additionally, we are looking at making changes to the process to enable us to more rapidly identify and refuse poor quality applications. This will ensure we are able to focus on applications that have a good chance of meeting our standards. New resource is expected to be in place in Q2 2021, with improvements seen from Q3 onwards.
Graph 22 shows we have achieved all the requirements to process a complete application for the variation of registration and authorisation of firms under the EMRs and PSRs. We did not receive any EMR variation of registration applications in 2019/20.
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, both against that standard and against our voluntary service standard to process 85% of these notifications within 10 working days.
We have achieved the target for this year as shown by graph 23.
Graph 24 shows that we have achieved our voluntary target for the last year.
4. Regulating existing businesses
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 quickly we have considered and responded to notifications and requests to vary permissions.
We recognise that in some areas, we have not met our service standards. We are committed to improving our performance against these standards going forwards. In the short term we are recruiting additional staff in areas of key pressure to increase the pace that we can allocate and determine applications. In the longer term, as part of transforming the FCA, we are looking at how we can make decisions faster. This includes making sure that we receive complete applications on submission and through opportunities to automate our processes.
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.
4.1. 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 section 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 may be recognised as individual schemes if the individual schemes satisfy the requirements set out in section 272 of FSMA. So, firms 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.
We have a statutory requirement to consider notice of proposed alterations to a CIS, and if appropriate, issue a warning notice. As graph 25 shows we have achieved the 100% target for each of the last 3 years.
4.2. Variation of permission
Firms may change the nature of their business and apply to add, vary or remove any regulated activities, investment or customer types. They may also apply to add or vary a requirement or limitation to, or remove a requirement or limitation from, the scope of their Part 4A permission.
In most cases we have a statutory requirement of 100% to process a complete application from an authorised firm for a variation of permission within 6 months (s55V(1) of FSMA) or 12 months of receiving an incomplete application (s55V(2) of FSMA). Graph 26 shows that we met the standard in 99.6% of cases. 7 out of 1,151 cases missed the standard. These applications were legally or technically complex and required significant engagement with the firms. Whilst we are committed to meeting the standard where possible, a small number of cases may need additional time for greater scrutiny or engagement for good reasons, for example where required to meet our objectives effectively. Due to staff pressures, the time taken to triage and allocate cases to case officers has increased and we are actively recruiting additional case officers in key pressure areas to help address this, with new resource expected from August 2021. Our ongoing transformation work will also support us to meet this standard in the long-term with the potential for modest improvements in efficiency being realised during the current financial year.
4.3. Cancellation of Part 4A permission
An authorised person with permission to carry on regulated activities (Part 4A permission) can apply to us to cancel their permission. 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 may cause harm to consumers or potential consumers. This may be the case, for example, if a firm has outstanding customer complaints.
We have a statutory requirement of 100% to determine a complete application for cancellation of Part 4A permission within 6 months (s55V(1) of FSMA) or 12 months of receipt of an incomplete application (s55V(2) of FSMA). Graph 27 shows we have achieved this target for the last 3 years.
4.4. Appointed representatives
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.
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-day voluntary target 48.1% of the time, which is below the target and lower than last year’s 84.2%. The time taken to process appointed representative notifications was affected by staff pressure, which was driven by the significant number of solo regulated firm related applications received as a result of the SM&CR regime introduction in December 2019. Recruitment is underway to bring in additional resources which should contribute to an increase in the volume of applications responded to within the voluntary target. Our ongoing transformation work will also support us to meet this standard in the long-term with the potential for modest improvements in efficiency being realised during the current financial year. We expect to be meeting this target within the current financial year 2021/22.
4.5. 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 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 for the previous 2 years.
4.6. 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.
4.7. Passporting notifications
Under passporting rights, introduced under European financial services legislation, firms that were authorised to carry out regulated activities in another European Economic Area (EEA) member state were also entitled to carry on business in the UK. To exercise this right, the directives required the firm to notify us, through its own home state regulator, of its intention to do business in the UK. The directives for which we had responsibility for processing notifications were: Markets in Financial Instruments Directive; Insurance Distribution Directive; Undertakings for Collective Investment in Transferable Securities Directive; Alternative Investment Fund Managers Directive; Mortgage Credit Directive; Payment Services Directive and E-Money Directive.
Following the United Kingdom's exit from the European Union, Passporting notifications have not been processed since the end of the transition period. The data here applies for the period up to 31 December 2020.
Graph 31 shows how we performed against our statutory standards for ‘Passporting in’. The target for both standards is 100%, but each standard relates to slightly different requirements. The first standard in the graph 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 and as per Schedule 3 paragraph 13 FSMA. The second standard in the graph 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. We have to process this within the relevant deadlines for each directive. For the first standard we did not meet the SLA on 1 case and for the second standard we did not meet the SLA on 2 cases, missing the 100% requirement for both standards.
We have 4 separate statutory standards for ‘Passporting out’ and these are all shown in the graph below. The first 2 standards relate to processing notifications from an FCA-authorised firm already carrying out business in another EEA member state under either ‘freedom of establishment’ or ‘freedom of services’. The second 2 relate to processing notifications of changes by an FCA-authorised firm already carrying out business in another EEA member state, again under either ‘freedom of establishment’ or ‘freedom of services’.
Graph 32 shows how we have performed in the 4 standards.
- The first standard is to process a notification under ‘freedom of establishment,’ within the timeframe set by the relevant directive. Our target is to do this 100% of the time within the relevant deadlines for each directive.
- The second standard is to process a notification under ‘freedom of services,’ within the timeframe set by the relevant directive. Our target is to do this 100% of the time within the relevant deadlines for each directive. We did not meet the SLA on 2 notifications and missed the 100% target.
- The third standard is to process a notification of changes under the ‘freedom of establishment’, within the timeframe set by the relevant directive. Our target is to do this 100% of the time within the relevant deadlines for each directive. On this standard we achieved this target this year.
- The fourth standard is to process a notification of changes under ‘freedom of services’, within the time frame set by the relevant directive. Our target is to do this 100% of the time within the relevant deadlines for each directive and we achieved this target this year.
4.8. Notification of a proposed change in control
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) of FSMA). One case out of 705 missed the service standard this year, despite higher than usual volumes. The case that missed the standard was due to an operational error where the case was incorrectly triaged. We are reviewing unallocated cases to ensure that they are triaged correctly going forward.
5. Listing Transactions
The Listing Transactions (LT) Department encompasses our transaction review functions and the management of the Official List through our Listing Applications team.
An issuer must make an approved prospectus 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, we must approve the prospectus. Where an application for approval is made to us, we must notify the applicant of our decision within the deadlines specified in FSMA. Unless we require further information, we 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 us 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. Our aim is to comment on submission within 10 working days 95% of the time. We have achieved this target this year as shown in graph 34.
Graph 35 shows our voluntary standard 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 the time. This also covers documents submitted to us for approval that do not fall under the new issuer standard, (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. We achieved our target, with a small increase compared to 2020.
All documents requiring our approval before publication must be submitted in substantially complete form. We often review several proofs of these documents before approval. As well as commenting on the initial proofs, we also aim to comment on subsequent proofs 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. The standard for new issuers is within 5 working days from receipt for comments on subsequent proofs of document 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.
The standard for existing issuers is within 3 working days from the day of receipt for comments on subsequent proofs of document submitted for pre-vetting by a listed issuer, or by an unlisted issuer, undertaking a public offer and that has previously produced a prospectus.
Graph 36 shows we have achieved both targets this year
We sometimes give guidance on applying our rules. We respond to reasonable requests for guidance and other queries made by, or on behalf of, the named party required to comply with the applicable rule. Our final standard is also voluntary and we aim to provide either a substantive reply or a request for further substantive information within 5 working days with a target of 95%. We achieved this target again this year but with a slight decrease compared to 2019/20, as shown in graph 37.