Common Delays in FCA Authorisation Processing: A Complete Guide

Feb 14 2025

Authorisation Authorisations

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Common Delays in FCA Authorisation Processing: Causes and Solutions

Common Delays in FCA Authorisation Processing: Navigating the FCA authorisation process can be a complex and time-consuming endeavour. For businesses aiming to operate within the UK’s regulated financial sectors, securing authorisation from the Financial Conduct Authority (FCA) is a legal requirement. However, while acquiring this approval opens the door to new opportunities, it’s no secret that delays in the process can slow progress, increase costs, and dampen strategies.

In this guide, we’ll explore the most common reasons behind these delays and arm you with actionable insights to help fast-track your application. Whether you’re seeking authorisation for payment services, digital assets, or insurance intermediation, knowing how to avoid these common pitfalls can save precious time.

What Causes FCA Authorisation Delays?

Delays in FCA authorisation often stem from a combination of applicant errors, incomplete documentation, and internal assessment timelines within the FCA’s review protocols. The stakes are high – poorly prepared applications often face outright rejections or costly holdups. Below, let’s cover the leading causes of such delays in detail.

Incomplete or Incorrect Applications

The FCA requires an exhaustive range of information to assess an applicant’s ability to meet its regulatory requirements. Missing forms, outdated references, or incomplete sections often account for one of the most frequent hold-ups.

Examples of Common Mistakes

Financial Projections: Submitting incorrect or unrealistic financial projections impedes progress, as the FCA scrutinises these figures to gauge the viability of your business.
AML/Compliance Frameworks: Weak anti-money laundering (AML) procedures or insufficient compliance systems raise red flags during the assessment.

How to Avoid This

Double-check every item on the FCA’s requirements checklist before submission.
Work with compliance consultants or legal experts to fill technical gaps.

Weak Supporting Documentation

Beyond the application itself, the FCA relies on supplementary documents to paint a full picture of the applicant’s credibility, experience, and compliance readiness. Delays often arise when businesses fail to provide thorough supporting evidence, particularly around governance or financial stability.

Examples of Weak Documentation Issues

Inadequate evidence of directors’ experience in the financial sector.
Insufficient protection for client funds (e.g., safeguarding arrangements in payment firms).
Sub-par risk management policies.

Solutions

Prepare comprehensive documentation addressing all key areas, including:

Corporate structure
Compliance policies
Evidence of financial resilience

Lack of Clear Governance or SMF Role Clarity

For firms subject to the FCA’s Senior Managers and Certification Regime (SM&CR), delays often stem from confusion around key personnel’s responsibilities. For example:

Ambiguity around who holds “significant influence” roles such as SMFs (Senior Management Functions).
Failure to recruit competent individuals for critical positions.

Such oversights can slow down the entire review process as the FCA seeks clarification.

Resolution

Clearly define each SMF in advance, ensuring their job descriptions align closely with FCA guidelines.
Train senior managers to be interview-ready when required to meet FCA assessors.

Internal FCA Assessment Timelines and Bottlenecks

Even with a well-prepared application, it’s important to acknowledge that the FCA’s own processes are multifaceted and time-sensitive. Specifically:

Volume of Applications: High workloads create bottlenecks, particularly in highly regulated industries like payments and insurance.
Internal Queries: Applications are often referred back to applicants for clarification, significantly increasing delays when businesses don’t respond promptly.

What You Can Do

Maintain proactive communication with the FCA. Keep a point of contact available to respond to queries fast.
Submit your application during periods of lower workloads (e.g., avoiding year-end rushes).

Non-Compliant Business Models

The FCA assesses whether a business model aligns with its regulatory perimeter, especially around customer benefit and market risks. Issues that breach FCA principles or ignore essential compliance controls lead to prolonged assessments or even refusal.

Examples of Non-Compliance

No clear identification of target customer segments.
Strategies that could harm consumer trust in financial markets.
Lack of proper financial risk assessments.

Preventing Delays

Before applying, audit your business model. Work with compliance experts to fine-tune all operational frameworks.

Sector-Specific Challenges

Different industries face unique hurdles during FCA authorisation. Here’s a brief look at common delays by sector:

Payment Services Firms

Issues: Inadequate safeguarding arrangements for client funds, missing PI insurance.
Solution: Adopt robust financial controls and prioritise regular audits.

Digital Assets

Issues: Weak AML measures and regulatory uncertainty around crypto operations.
Solution: Build comprehensive AML/KYC frameworks and address asset custody risks.

Insurance Intermediaries

Issues: Insufficient capital adequacy ratios, unclear consumer protection plans.
Solution: Create risk management systems tailored to insurance-specific challenges.

By recognising these vertical-specific delays, businesses can tailor their application structure.

How to Avoid FCA Authorisation Delays

Minimising delays means anticipating potential weaknesses in your submission and addressing them early. Here are actionable tips to streamline the process:

Engage Experts: Consultants and lawyers specialising in FCA regulation help avoid costly errors. Compliance Consultant are specialists in this area since 2008.
Prepare Early: Gather documentation well in advance, leaving time for corrections. A properly prepared application pack saves weeks during the process after submission.
Respond Quickly: Delays compound when applicants fail to reply to FCA enquiries promptly. The FCA will stop the application clock if ALL the material is not received back on time.
Use the FCA’s Pre-Application Support: The FCA encourages businesses to discuss applications with their pre-authorisation team. This is a valuable addition to the pack, as reference numbers are provided for each enquiry and show involvement by you at an early stage to understanding your obligations.

Note: We earn more money from badly completed application than if we had prepared the pack beforehand. Why? Because we have to understand what has already been submitted to know what went wrong!

FAQs about Common Delays in FCA Authorisation

What’s the most common reason for FCA application delays?
The most frequent reason is incomplete applications, often due to missing details or weak supporting documentation.
How long does the FCA authorisation process usually take?
Processing times vary, but averages suggest 3 to 12 months, with sector-specific timescales affecting duration.
Can a poorly prepared application lead to rejection?
Yes, sub-standard submissions are often rejected outright or cause significant delays that harm business operations.
Are certain industries more prone to delays?
Absolutely. Payment services, crypto firms, and insurance intermediaries face higher scrutiny, making delays more common.
How can I speed up FCA authorisation?
Work with professionals, ensure documentation is complete, and communicate with the FCA consistently.

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