Planning to Launch? What You Need to Know About FCA Authorisation in 2025

Written by Musunga Badewa
Consultant

You’ve got the strategy, the team, and maybe even a few cornerstone investors lined up. You’re ready to launch your fund, investment management, investment advisory or trading business in the UK. But there’s one problem: you need FCA authorisation.

With the FCA’s new growth objective and the Chancellor of the Exchequer’s “open for business” mantra, you might expect the door to be wide open. But for those of us who deal with authorisations regularly, we know the process remains detailed, risk-sensitive, and—if you’re not prepared—frustratingly slow.

Whether you’re a boutique investment firm, a private equity GP, an international firm seeking a presence in the UK or a first-time launch with institutional backing, this article is for you. We’re going to unpack what the authorisation process actually involves, what firms need to think about now, and what lies ahead for applicants.

What Are Your Options? Direct Authorisation vs Hosting

Let’s start with the basics. You’ve got two main routes to market:

1. Direct Authorisation – You apply for full FCA authorisation under Part 4A of the Financial Services and Markets Act. You own the licence, manage your own compliance infrastructure, and are directly accountable to the regulator.
2. Regulatory Hosting – You operate under the permissions of an FCA-authorised firm as either an Appointed Representative or via secondment. Hosting platforms take on regulatory risk and provide a ready-made compliance framework. ¹

Hosting is faster (2–3 months) and helpful if you’re looking to trade quickly or you don’t yet have adequate resources to apply for direct authorisation. For example, you won’t require a Compliance Officer and there are no regulatory capital requirements. But it comes with trade-offs—particularly around control and scalability.

Cost of Entry ²

Let’s talk numbers. The FCA charges a fixed application fee based on the type of firm and the permissions being sought. For most investment firms applying as MiFID investment managers, fund managers subject to AIFMD or principal trading firms, the standard application fee is £10,880. Firms applying as corporate finance advisers, wholesale brokers, or MiFID advisers and arrangers fall into a lower fee category, with a charge of £2,720.

These are just the regulatory costs. Once you factor in professional fees for legal advice, compliance consultancy, document drafting, and internal resources, most firms should expect to spend somewhere between £30,000 and £75,000 to complete the process. For more complex applications or firms with non-standard structures, costs can be higher, especially if additional clarification is needed from the FCA or if the timeline extends due to missing information or staffing gaps.

Authorisation Is Your First Conversation with the FCA

And first impressions count.

This is your first real engagement with the regulator. If your application is incomplete, inconsistent, or vague, you’re setting the tone for future scrutiny. Think of authorisation as the regulator’s opportunity to ask: do we trust this firm to run itself well and not pose harm to the market or its clients?

That means more than just filling in forms. The FCA wants to understand:

• Your business model: What do you do? Who are your clients?
• Threshold conditions: Do you have the resources, structure, and people to meet expectations?
• Compliance infrastructure: Who’s managing risk? Are systems embedded?
• Financial promotions: Are they fair, clear, and not misleading?
• Client categorisation: Do you know who you’re dealing with and how they’re protected?
• Operational resilience: How will you handle disruption?
• Conflicts of interest: Are they identified and mitigated?
• Funding: Where is the money coming from, and is it sufficient?

A good compliance consultant will help you frame these issues clearly, anticipate regulator concerns, and package your application in a way that tells a credible story.

Application Timeline: What to Expect

Once your application is submitted, the clock doesn’t start ticking just for the FCA—it starts for you too. Here’s a realistic overview:

• MiFID Adviser/Arranger: 2–3 months (if straightforward), up to 6 months if not
• MiFID Investment Manager: 6 months
• AIFM (Full-Scope): 6–9 months

But here’s the kicker: delays are often down to the firm, not the FCA. Missing Senior Managers Regime documents, delayed hires, unclear business models, or slow responses to FCA queries can all push the timeline out up to 12 months, which is the FCA’s statutory deadline for processing an ‘incomplete’ application. A well prepared ‘complete’ application isn’t just about submitting all the forms—it’s about telling a coherent story that stands up to scrutiny. A well-prepared and complete application, submitted with confidence and supported by a knowledgeable compliance consultant, can go a long way in reducing the risk of delays or complications.

PASS Meetings and ‘Learner Plates’

If your business model is unusual or your structure is more complex, the FCA offers Pre-Application Support Service (“PASS”) meetings ahead of submission. This gives firms a valuable opportunity to get early feedback and reduce the risk of surprises later in the process.

After authorisation, some firms—particularly those growing quickly or operating in higher-risk areas—may come under the FCA’s Early and High Growth Oversight team. Think of it as a “learner plate” phase, where there’s closer supervision to help ensure, the firm is on the right track from the outset.

This isn’t a negative. It reflects a more collaborative approach from the regulator—focused on support and guidance rather than enforcement. But it does mean firms need to be ready for ongoing dialogue with the FCA from day one.

So, What Does the Future Look Like?

There’s a growing recognition that the FCA authorisation process needs to evolve. It should be more transparent, less bureaucratic, and better aligned with the actual risk posed by firms.

The FCA has signalled that the time taken to authorise firms may shorten, but a trade-off would be a more intensely supervised “learner plate” phase.

But until that change materialises, firms need to approach the process with realism. “Britain is open for business” is an encouraging message, but it doesn’t translate to shortcuts or lower standards. What it does mean is that firms with a well-structured model, strong governance, and credible plans have a clear path forward.

If you’re thinking about applying, it’s worth asking a few honest questions.

• Are we ready to meet the FCA’s expectations today?
• Do we have a compliance infrastructure that’s embedded and operational, not just theoretical?
• Have we built a clear, sustainable business model that can stand up to regulatory scrutiny?

Authorisation is a challenge, but it’s also your first opportunity to show the regulator that your firm is serious, well-prepared, and here for the long term.

How can we help?

Our experts have undertook 500+ FCA applications since 2003, so we fully understand the big picture and can help you meet the FCA’s expectations in demonstrating that your firm is present in the UK and able to meet the Threshold Conditions.

We also provide regulatory hosting solutions via two solutions. Our advisory platform allows firms to provide investment advice and arrange deals in their own name, as well as marketing of investment services and funds to professional clients. In addition, the Capricorn Fund Managers platform provides discretionary investment managers with institutional quality investment and regulatory hosting solutions.

Contact us here to discuss how we can help.