Hi Jacob,

My firm is seeking direct authorisation from the FCA, but I heard that 1 out of 5 firms get rejected! Can you tell me why so many firms get declined so I can better prepare? –


Hi Michelle,

The FCA authorisation process has become much more stringent recently, primarily to prevent harm and improve conduct standards and culture in firms. There are several key factors why firms might be declined (or have the FCA suggest that they “withdraw”):

1. Incomplete or poor-quality applications. The FCA expects applications to be comprehensive, bespoke and complete. Firms need to show they are “ready, willing and organised” to operate from the day they become authorised.

2. Failure to meet threshold conditions. Often, firms apply for authorisation too early, before they are ready to satisfy the minimum FCA threshold conditions outlined in Part 4A of the Financial Services and Markets Act 2000. These include having appropriate financial and non-financial resources and having appropriate systems and controls in place.

3. Failing to meet Fit and Proper criteria. The FCA assesses the firm’s senior management and key personnel to ensure they are of good repute and demonstrate honesty and integrity. This involves reviewing any previous criminal convictions, regulatory breaches, business & employment history, and involvement in civil or disciplinary proceedings. The firm must also demonstrate that its management and staff have the required skills, experience, qualifications and training to effectively perform their roles.

4. Business model or Conduct concerns. If the FCA believes a firm’s business model may lead to poor consumer outcomes or has concerns about the conduct and culture within the firm, the application might be denied.

5. Non-disclosure. Firms or their connected individuals, sometimes provide incorrect or incomplete information as part of the application. The FCA takes non-disclosure or providing false information very seriously, and such actions often result in application refusal.

Please note that these are general reasons only, and depending on the type of firm, the FCA may have additional requirements and/or seek clarification throughout the application process.