Wholesale investment firms

Here we explain the main things you need to do before applying to us for authorisation.

Please note this is not an exhaustive list and there may be additional factors that need to be considered on a case-by-case basis.

What to read before applying

Please start by reading Our Approach to Authorisation and our page on being ready, willing and organised. This will help you understand our expectations of applicants.

It's also important to review the following modules in the FCA Handbook:

  • PERG The Perimeter Guidance Manual – you'll need to explain how the permissions and investment types match up with your business model, and how you intend to hold and/or safeguard any client money or assets
  • COND Threshold Conditions – you'll need to explain how you'll continue to meet each Threshold Condition
  • Prudential Standards – you'll need to explain why you believe you fall into the prudential category you have identified

Then refer to our list of required forms on the Wholesale investment firms and authorisation forms page, with more detailed information for your firm type in this section.

Finally, review the MiFID annex notes for new firm authorisations or a variation of permission – whichever applies to you.

Preparing your application

You may wish to complete a business plan that covers all key areas. For help, refer to the business plan contents template below.

As part of your application, you must designate a principal place of business (serviced offices are generally considered inadequate) and have a bank account for your firm. If you propose to hold client money or assets, you'll need to set up client money accounts as well.

Some applications take longer because the business plan is not detailed enough. Make sure you include the following sections to help your application.

Background: State the aims and objectives of your firm and why you're applying for this type of authorisation. If your firm is part of a wider group, explain where it fits in with the group strategy.

Business to be undertaken: Explain where your firm will fit within the market and how your products and services compare to competitors. This should include the types of business your firm intends to be involved in (including, for example, a customer profile) and how your business will be distributed.

We also expect to see complete projected financials that explain how you will maintain your minimum capital requirements.

Governance: Provide an overview of your firm’s governance arrangements, including Board composition and any Board sub-committees.

Staff: Include an organisation chart that shows your key staff and roles, including all controllers and close links, what business they conduct and whether they are regulated.

Explain the rationale for the appointment and suitability of members of the governing board, the compliance officer and other Approved Persons. Describe the background and experience of everyone performing significant, influence-controlled functions such as directors or senior managers.

Outsourcing: Think about what areas of the business are going to be outsourced and how this will be overseen.

Systems and controls / Risk Management: Consider how your firm will identify and manage conduct risks. Provide an overview of your firm’s financial crime controls, anti-money laundering procedures and due diligence processes.

Information Technology: Include a completed IT self-assessment questionnaire.

Avoid delays to the process

Many factors could delay the application process, so follow the guidance below to ensure your application goes as quickly and smoothly as possible. 

Make sure your application has no incomplete or missing forms – see our tables of required forms. Where specified, documentation should be signed, with passwords provided if files are password protected.

All important positions, such as compliance or AML officers, should be filled.

If you're an Alternative Investment Fund Manager you must make arrangements for prudential capitalisation to take place before or shortly after submitting your application.

Be clear

Your application may stall if you have a generic business model and don't explain your firm's specific activities and how these align with the permissions you're applying for.

You need to make clear how you'll use any niche investment types such as high-risk contracts for difference or alternative debentures, as well as your oversight procedures for outsourcing arrangements.

If a significant proportion of your firm’s controlled function-holders are overseas, you must explain how they'll carry out their functions at a distance.

Be prepared

Ensure that the technology or systems you will be using are ready to carry out the applied-for regulated activities​​​​.

Your application may be delayed if you intend to arrange outsourcing but have not started negotiations, or are at a very early stage.

Be compliant

It's important that you identify conflicts of interest and/or explain how you intend to manage or mitigate such conflicts.

You must be open and co-operative (Principle 11) with us and provide responses within the requested dates.

Your application must make clear what compliance arrangements will be in place to meet your firm’s ongoing regulatory obligations.

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