All firms which apply for authorisation have to meet the FCA's minimum standards to become authorised – known as the “Threshold Conditions”. These conditions are that the firm:
- is registered with Companies House and has the appropriate legal status to carry out regulated activities;
- is a “body corporate” constituted under UK law, with its “mind and management” (directors, compliance and audit functions) located in the UK;
- must be capable of being effectively supervised by the FCA: this means that in most cases it should have a UK establishment;
- must demonstrate that it has appropriate resources – including financial, management, staff and systems and controls;
- must demonstrate the competence and ability of management, and that the firm's affairs are conducted in an appropriate manner regarding the interests of consumers and the integrity of the UK financial system; and
- must have a business model which is suitable for its regulated activities and has regard to the FCA's operational objectives.
Once a firm is authorised, it will also have to meet the FCA's requirements on Approved Persons/Controlled Functions, and regulatory reporting.
