Learn more about how to apply for FCA authorisation if you are a CMC.
When to apply
If you registered for temporary permission (TP), you should have received confirmation of which period you will need to apply for full authorisation.
Application period 1 (1 April to 31 May 2019) is for:
- CMCs that only do financial products and services claims work (but not CMCs who only do lead generation work)
- CMCs new to CMC regulation (eg some Scottish firms or firms exclusively handling Section 75 claims)
Application period 2 (1 June to 31 July 2019) is for all other CMCs. This will include:
- CMCs that do financial services and product claims work and also do lead generation for non-financial services/products claims
- CMCs that only do lead generation (regardless of sector)
- CMCs operating in all other sectors
They will have 30 days to wind down their business and explain to existing customers how to continue claims without their help; and they must not commence any new claims during this period.
If you don't have a claims management TP yet, and are not currently carrying out regulated CMC activity, you can apply whenever you are ready. But you must not carry out any regulated CMC activity until you are fully authorised by us to do so.
Before you apply
8 things to do before applying:
- If you have registered for temporary permission, have your Firm Reference Number ready.
- Have your National Insurance or passport number (for sole traders and any individuals) ready.
- Gather any relevant business documents, such as draft agreements and pre-contract information.
- Calculate the highest projected amount of client money (if your firm holds this) and the estimated annual income for claims management activities.
- Establish the regulated financial activities you will carry out.
- Collate details of partners, shares, subordinated loans or other external funding and financial resources.
- Prepare a business plan (see below).
- Check you meet our Threshold Conditions for authorisation – this is explained in the Threshold Conditions supplement form you will need to complete.
What an application must include
We need a range of information about your business, namely a business plan – which sets out your objectives, customers, employees, governance, plans and projections.
This is likely to include:
- full explanation of your business, its background (including its legal structure and creation) and what it will do, including the sectors it wishes to operate in
- objectives (eg business opportunity, market share, aims)
- details of your governance framework and key personnel
- experience and employment background of your firm's principals and an explanation of how they are competent to perform the regulated activities you want to carry on
- analysis of key conduct risks
- any outsourcing plans or other key operational matters
- your long-term strategy and financial projections for 3 years
- where customers will be sourced from with details of any lead generators
- any unregulated activities your business will perform
- details of websites, promotions and communications
If your application is missing some of this information, we will ask you to fill in the gaps. This will delay the application process.
Submitting your application
Please use our online system Connect to make applications and notifications to us:
You will also need to complete the Threshold Conditions supplement form, which is not yet available in Connect, and attach it to the rest of your application.
Once you have submitted your application
- We will email you to confirm we've received it.
- We will email separately to confirm it's been assigned to a case handler.
- The case handler will review your application and update you.
We will make a decision as soon as possible. This will be within 6 months of you submitting a complete application. For an incomplete application, this will be within 12 months from the date of submission.
If your firm’s application is successful, you will need at least 1 individual approved to perform a Senior Management Function by 9 December 2019 (or the date at which your firm receives re-authorisation, whichever is later). Most pure CMCs will only require 1 individual to be approved, but larger firms (turnover of more than £1m) will require 2. You will need to submit this application from 9 September 2019. It must be received by 9 November 2019 at the latest.
See more detail on what to expect after you submit to us your application for authorisation.
Current Appointed Representatives
As a firm cannot be both authorised and exempt, any firms that are currently an Appointed Representative (AR) under the current FCA regime will need to decide how they wish to proceed. They can continue to be an AR while they have a claims management temporary permission but they will need to decide what they want to do by the end of their allocated landing slot. They have several options:
- stop being an AR for the regulated activity and apply for authorisation for both the CMC activity and the activity they performed as an AR
- stop being an AR and performing that regulated activity
- stop CMC activity and continue being an AR
- establish another legal entity and ensure that their CMC activities are AR activities are carried on by separate entities