FCA sets out its approach to authorisation and its approach to competition

When the FCA launched its Mission, it committed to publishing a series of documents that would explain its approach to regulation in more depth.

Today’s approach documents are the second and third in this series and follow on from the approach to consumers which was published in November.

Andrew Bailey, FCA Chief Executive said:

'As part of our Mission, we committed to being more open and transparent about how we regulate and how we make decisions.

'Authorisation is the gateway for firms that want to operate in the financial services industry. We use it to prevent harm from occurring by ensuring that all firms meet our minimum standards before they are allowed to start doing business. It’s vital that we get it right to keep out firms that are not up to scratch and allow the right ones through.

'Effective competition in financial services benefits consumers and firms. We are one of the few financial regulators in the world with a core objective to promote competition and it applies to all the work we do.'

The Approach to Authorisation document asks questions about how the FCA approaches authorisation.  They are:

• whether there is a clear understanding of the Threshold Conditions that firms and individuals must meet for authorisation and, if not, where the FCA could be more specific
• whether there are any views on how the FCA supports firms and individuals to meet the minimum standards and how this could be improved
• whether the FCA has suggested the correct commitments to firms making authorisation applications and what other commitments could be made
• whether the FCA has prioritised the right strategic goals and if there are any additional goals which would add value to the FCA’s work

The Approach to Competition document asks questions about how the FCA approaches competition. They are:

• whether the FCA’s competition remit, powers and aims are clearly understood and what more could be done to explain them
• what indicators of potential harm should be considered in the FCA’s preliminary assessment of competition
• what other tools could be used when designing remedies to address a lack of competition
• whether any further clarification of the FCA’s approach to competition is needed.

Both approach documents are open for consultation until 12 March 2018. The final approach documents will be published next year.

Notes to editors

1. Our Approach to Authorisation.
2. Our Approach to Competition.  
3. On 1 April 2013, the FCA became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
4. The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
5. Find out more information about the FCA.