Over the past 12 months, there has been a noticeable improvement in the FCA's approach to processing authorisation and Variation of Permission (VoP) applications. In July 2025, the FCA introduced a revised target to determine complete authorisation applications within four months, reducing its previous six-month target.

This forms part of the regulator's wider objective of making the UK the best place in the world for financial services to thrive, whilst maintaining the high standards necessary to protect consumers and support the reputation of UK financial markets.

Whilst this is undoubtedly a positive development for firms seeking regulatory approval, the FCA has been clear that faster outcomes are heavily dependent on the quality and completeness of the applications submitted. Incomplete applications, inconsistent supporting documents, and poorly evidenced governance arrangements remain common causes of delay.

In April 2026, the FCA published further guidance for firms seeking authorisation within the asset management sector. The review highlights examples of good practice and areas for improvement that have been identified from previous applications. This followed an earlier publication issued in September 2025 which examined authorisation and registration applications more broadly and highlighted recurring weaknesses across a range of sectors. Together, these publications provide valuable insight into the FCA's expectations and the factors that can either facilitate or delay a successful application. Submitting an application to the FCA requires careful preparation. In this article, we highlight the areas the regulator considers most important when assessing submissions.

Establishing effective UK management

A recurring theme throughout the FCA's findings is the importance of being genuinely "UK-led". The regulator expects key decision-making, oversight, and management activities to be undertaken in the UK on a day-to-day basis. This includes decisions relating to portfolio management, distribution, and the oversight of outsourced functions.

The FCA observed good practice where firms maintained an appropriate senior management presence within the UK and ensured UK-based individuals had sufficient authority to challenge overseas owners. Where firms formed part of international groups, UK-based senior managers were able to demonstrate genuine oversight and accountability.

The FCA’s September 2025 publication also highlighted the importance of having individuals with the appropriate skills, experience, and capacity to perform their roles. It noted positively where firms identified resource gaps early and provided credible plans for recruitment or training to address them.

Keeping control of outsourced activities

Outsourcing remains a common feature for many firms looking to obtain an FCA licence. However, the FCA has reinforced an important regulatory principle, reminding firms that although activities may be outsourced, responsibility cannot.

The regulator highlighted examples of good practice where firms had clearly identified all outsourcing arrangements, documented how they will oversee third-party providers, and implemented effective service level agreements with a monitoring framework in place. The findings suggest that firms should be prepared to explain not only what activities are outsourced, but also how they will maintain ongoing oversight and demonstrate compliance with applicable regulatory requirements without having full control over outsourced activities.

Business models, risks, and financial resources

The FCA expects firms to demonstrate a clear understanding of the risks inherent in their business model and the potential harm those risks could pose to clients, markets, and the firm itself. Applications should therefore set out how key risks have been identified, assessed, and appropriately mitigated.

According to the FCA, stronger applications clearly articulate the nature and impact of potential risks and provide detailed explanations of the governance arrangements, systems, and controls established to manage them. Firms should ensure that this assessment is comprehensively documented within their Internal Capital Adequacy and Risk Assessment (ICARA) process, enabling them to demonstrate the maintenance of adequate financial and non-financial resources to operate prudently and meet regulatory expectations.

The September 2025 publication further highlighted the importance of financial resources. Examples of good practice included firms providing robust financial forecasts, credible stress-testing scenarios, and clear explanations to support the assumptions underpinning their financial projections. In contrast, the regulator identified the following recurring weaknesses in business plans it received:

• Incomplete financial information

• Unsupported assumptions

• Inconsistencies between business plans, risk assessments, and financial forecasts

Overall, firms should ensure that their business plans, risk assessments, ICARA documentation, and financial projections are aligned, evidence-based, and demonstrate adequate risk management and financial resilience.

Conflicts of interest

Conflicts of interest continue to be a key supervisory focus for the FCA. The regulator observed good practice where firms maintained a conflict register tailored to their business model and documented the processes used to identify, prevent, and manage conflicts. Stronger applications were able to demonstrate how conflicts would be reviewed and how staff would disclose actual or potential conflicts.

These observations align with the wider findings from September 2025, where the FCA stressed the importance of maintaining robust policies and procedures that reflect actual business activities rather than relying on generic template documents.

Understanding clients and maintaining consistency

Another area where the FCA identified weaknesses was client categorisation. The expectation is that firms understand their target client base and the regulatory requirements that apply to those clients.

Good applications demonstrated a clear understanding of client types, aligned business plans, and financial forecasts with those client groups, and explained how relevant suitability or appropriateness requirements would be met. It is important to make it clear how clients will be categorised and ensure this is consistent across all supporting documents within the application.

A summary of what works, and what causes delays:

UK Management

• Good practice - Visible UK senior management with authority to challenge overseas owners.

• Poor practice - Decision-making that sits overseas in practice, despite a UK presence on paper.

Outsourcing

• Good practice - Clear oversight, documented service level agreements and monitoring.

• Poor practice - Assuming that outsourcing transfers responsibility, rather than simply the activity.

Risk and financial resources

• Good practice - Aligned business plan, risk assessment and ICARA, with credible forecasts.

• Poor practice - Incomplete financial information or unsupported assumptions.

Conflicts of interest

• Good practice - Tailored conflict register and clear disclosure processes.

• Poor practice - Generic template policies that do not reflect the business.

Client categorisation

• Good practice - Consistent client categorisation across every document.

• Poor practice - Inconsistent treatment of client types between documents.

From application to approval

The FCA's recent observations suggest that many application shortcomings stem not from a lack of information, but from a lack of coherence between the information provided. Firms should therefore focus on ensuring that the various components of their application tell a consistent story and collectively evidence a well-considered and operationally sound business.

As the FCA continues to improve authorisation timelines, firms that invest time upfront in preparing a complete, coherent and well-supported application will be best placed to benefit from a more efficient process while reducing the likelihood of delays and regulatory challenge. Our team works closely with firms throughout the authorisation process to prepare, review, and build strong applications and respond confidently to FCA requirements. Fill in the form below to discuss how we can support your application.