SIFA 5.1 Authorisation

The Authorisation manual (AUTH) sets out the background and provides guidance on how we authorise firms. All firms and individuals enter the regulatory environment through an authorisation or approval process. Our assessment at entry aims to allow only those firms and individuals satisfying the necessary criteria (including honesty, competence and financial soundness) to engage in regulated activity.

Our duties are to:

Before granting Part IV permission (permission for a firm to carry on regulated activities under the Financial Services and Markets Act 2000 (the Act)) we must ensure that the applicant satisfies and will continue to satisfy the threshold conditions. These are as follows:

The threshold conditions are set out in Schedule 6 of the Act. There is guidance on the conditions in COND. You are responsible for ensuring that you continue to meet the threshold conditions in order to retain your authorisation and scope of permission.

Following a successful application, we will grant an applicant Part IV permission. The scope of your firm's permission is set out in a Scope of Permission Notice that defines the scope in terms of regulated activities together with any limitations on customer type or product and any other requirements or restrictions.

Your permission will specify the regulated activities and the investments where you can do business with private customers. A permission may also include one or more limitations or requirements as explained in section 5.1.13 below.

You are responsible on a continuing basis for ensuring that your firm holds the correct permission that includes the investment business activities that you wish to carry out.

Both the Authorisation and Supervision manuals are relevant.

In the Authorisation manual (AUTH) there is:

1. (1)

   An overview of the sourcebook in AUTH chapter 1.

2. (2)

   An explanation of the authorisation process and the permission regime in AUTH chapter 3. This includes the following sections:

After Part IV permission has been granted, a firm can apply to vary or cancel that Part IV permission including any limitation or requirement, at any time. The procedures that need to be followed are set out in SUP chapter 6.

Chapter 15 of this Overview covers Variation and Cancellation of Permission.

The Application Pack and Guidance notes are available from our:

1. (1)

   Publications Helpline or our Enquiries and Applications Department at a charge of £25.00 plus VAT; or

2. (2)

   from our website. (We plan to produce enhanced guidance and a shorter version of the Application form to help smaller firms with their applications. This should be available for firms to use in the first quarter of 2004.)

When we grant an application for Part IV permission, we will update the FSA Register with the activities the firm has permission to carry on. You can access the Register on our website.

There are the following further issues relating to authorisation:

1. (1)

   The scope of your firm's permission affects the fees you pay us. Broadly, the wider the scope the higher the fees.

2. (2)

   The scope of your permission may also affect the category of business into which your firm falls for financial resources purposes.

3. (3)

   We consider the scope of a firm's permission when deciding which risk category the firm falls into. We monitor firms in a higher risk category more closely.