Sarah Rapson has spoken of FCA’s approach to authorising firms. She focused on FCA’s use of authorisation as a way to prevent harm, and its focus on using it proportionately. As a result, the information it asks firms for, and the degree of scrutiny it gives it, has to be linked to its assessment of the harm firms could cause. FCA has been consulting on the authorisation process. It had noted some applications were needlessly complex and thinks this may be because the applicant firms have not understood the threshold conditions. It is working to give firms as much guidance as possible before they start the application process to minimise the prospects of failure.
It also uses authorisation to improve conduct standards and culture within firms because of the testing FCA carries our on firms’ business models.
But FCA cannot, and it believes should not, create a zero-failure regime, because this would be both unachievable and would stifle innovation and competition.
She finished by talking of some common pitfalls. These include firms failing to provide the information FCA asks for, misunderstanding what is required of them, not engaging with FCA or applying for authorisation prematurely.