01Sep

Information published in late August 2016 indicates that it now takes the Financial Conduct Authority (FCA) an average of 25 weeks to make a decision on an application for authorisation.

In extreme cases it can take 74 weeks (almost 18 months) to reach a decision. In the previous quarter the regulator had indicated that its maximum waiting time was 50 weeks, so this figure has risen by almost 50% in just three months. It cites the need to provide staff training in handling firms’ applications as the reason for the increase.

The FCA comments:
“Our average processing time for both retail and wholesale firm type applications has increased as anticipated while additional temporary staff are brought in and trained.

“We expect our APT (average processing time) to continue to increase in the next quarter as these additional staff become fully proficient; we then expect to see our APT improve.”

The average time taken to approve variation of permission applications has fallen from 15 weeks just three months earlier to 10 weeks, although here the APT has also increased, from 38 weeks to 44 weeks. A variation of permission application is one made by a firm that is already authorised that wishes to expand into another area.

Here the FCA stated:

“Our APT for retail firm type applications has improved as a result of us bringing in additional temporary staff. We expect to maintain the APT for retail firm type applications over the next quarter.”

In the second quarter 89% of applications for first-time authorisation were approved, and the remainder were withdrawn. 94% of variation of permission applications were approved during the same period. The regulator comments that many firms decide to withdraw their application once serious questions are raised, rather than risking a refusal.

In the main, there is little firms can do to speed up the approval process. While they are waiting for first-time authorisation to be granted they cannot carry out any regulated activity. While they are waiting for a variation of permission application to be granted, they cannot carry out the activity for which they are awaiting approval either.

Firms can however make the FCA’s life easier by ensuring that all required information and documentation is supplied with the initial authorisation application, and that they respond promptly to any queries the regulator subsequently raises. Seeking assistance from a professional compliance consultant can be invaluable when firms want to know what to submit with an authorisation application.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.