Refusals are rare. Withdrawals are not. The typical failed application is one that entered the process incomplete, absorbed three or four rounds of questions, and was withdrawn when the applicant ran out of runway. Understanding what the case officer is assessing at each stage is the difference between a determination and an attrition.
The framework: threshold conditions
Every application is assessed against the threshold conditions. Four carry most of the weight in practice.
Location of offices and effective supervision. The FCA must be able to supervise the firm effectively. Mind and management must be in the UK, with real decision making here rather than a UK entity operating as a branch of an overseas group in substance.
Appropriate resources. Financial resources adequate for the model and the wind-down scenario, and non-financial resources meaning people, systems and controls proportionate to the business.
Suitability. The firm and its controllers and senior managers must be fit and proper, with integrity, competence and a track record consistent with the permissions sought.
Business model. The model must be viable, must not create undue risk to consumers or market integrity, and must be consistent with the permissions requested.
Where applications actually break
| Failure point | What it looks like | What the case officer infers |
|---|---|---|
| Permissions mismatch | Activities described in the plan not covered by the permissions requested, or vice versa | The applicant does not understand its own regulatory perimeter |
| Business plan and projections diverge | Volume assumptions inconsistent between narrative and model | The plan was written by different people and not reconciled |
| Generic policies | Policy suite that describes controls the firm cannot perform | Documentation exercise rather than an operating framework |
| Thin governance | Non-executive presence nominal, senior managers with limited availability | Insufficient substance for effective supervision |
| Financial crime framework | Risk assessment not reflecting actual customer and geographic exposure | Framework not designed for this business |
| Safeguarding arrangements | Account arrangements or reconciliation process undefined | Firm not ready to hold relevant funds |
| Wind-down plan | Generic template, no funding analysis | Resources condition not satisfied |
| Slow question responses | Multi-week delays, inconsistent answers | Under-resourced applicant, execution risk |
How long the FCA has to decide
| Application | Complete application | Incomplete application | Source |
|---|---|---|---|
| FSMA authorisation, for example consumer credit or investment firms | 6 months | 12 months | Section 55V FSMA |
| Payment institution or e-money institution | 3 months | 12 months | Payment Services Regulations and Electronic Money Regulations |
| FCA target for payments and e-money applications | 3 months | 10 months | FCA published targets |
HM Treasury plans to cut the FSMA limits to 4 and 10 months through the Financial Services and Markets Bill 2026-27. Until the Bill is in force, the current limits apply. Cryptoasset firms seeking authorisation under the new UK regime apply in the window that opened on 30 September 2026 and closes on 28 February 2027.
A well-prepared application is determined within these periods. An incomplete one runs against the longer limit.
The business plan is the spine
Everything else is read against the business plan. It should set out the customer segments and the specific need served, the products and the exact regulated activities performed, the flow of funds and who holds them at each stage, the distribution model including any agents, introducers or partners, the geographies of customers and counterparties, the technology architecture and which components are outsourced, the organisational structure with named individuals and their time commitment, and the financial projections with stated assumptions.
The projections must reconcile to the narrative. If the plan describes 20,000 customers in year one and the model assumes 60,000, the case officer will ask, and the answer will determine how the rest of the pack is read.
Governance substance
The most difficult issues to remedy mid-application are governance ones. A firm with a single executive holding multiple senior management functions, non-executives who attend quarterly with no independent information, and key operational decisions taken by a parent overseas will struggle against the effective supervision condition regardless of the quality of its documents.
Managing question rounds
Treat each round as an assessment. Respond completely rather than partially, keep every answer consistent with the pack and with previous answers, flag changes to the model promptly rather than allowing them to emerge, and where an answer requires a change to a policy, provide the revised policy rather than a description of the intended change.
Our guidance on the FCA authorisation process step by step sets out the full sequence, and our permissions review guidance covers alignment between activities and permissions.
About Regulatory Counsel
Regulatory Counsel advises UK and international financial services firms on authorisation, prudential and conduct requirements, governance, financial crime and regulator engagement.
Our authorisation work covers perimeter and permissions analysis, business plan and financial model development, governance design and senior manager preparation, bespoke policy and control frameworks, safeguarding and financial crime frameworks, wind-down planning, and management of FCA question rounds through to determination.
Contact our regulatory team at [email protected] for a written proposal.
This article is provided for general information and does not constitute legal or regulatory advice. Firms should confirm the current position against FCA publications and take advice on their specific circumstances.
Frequently asked questions
Most fail through attrition rather than refusal: incomplete applications generate repeated question rounds until the applicant withdraws. The underlying causes are usually permissions mismatch, an unreconciled business plan and financial model, generic policies, thin governance and weak financial crime or safeguarding frameworks.
The minimum standards a firm must satisfy to be authorised, including location of offices and effective supervision, appropriate financial and non-financial resources, suitability of the firm and its controllers, and a viable business model consistent with the permissions sought.
The FCA must be able to supervise the firm effectively, which in practice requires genuine mind and management in the UK, with substantive decision making by UK-based senior managers rather than by an overseas parent.
It is the document against which everything else is assessed. It must describe activities, fund flows, distribution, geography, technology and organisation, and must reconcile precisely to the financial projections and the permissions requested.
Respond completely and promptly, keep every answer consistent with the application pack and with earlier responses, provide revised documents rather than descriptions of intended changes, and notify any change to the model proactively.
For FSMA applications, up to 6 months from a complete application and 12 months from an incomplete one. Payment and e-money applications must be decided within 3 months of a complete application and 12 months in any event, and the FCA targets 10 months for incomplete ones.
The FCA application window opened on 30 September 2026 and closes on 28 February 2027. The regime commences on 25 October 2027.
For FSMA applications the FCA gives a warning notice, then a decision notice. The applicant can make representations and can refer a refusal to the Upper Tribunal. Many applicants withdraw before that stage, which is why a complete first submission matters.
Definitive guides on this topic
The permanent reference pages this article relates to.