Do I need FCA authorisation?

What is the general prohibition?

Section 19 of the Financial Services and Markets Act 2000 (FSMA) says that no person may carry on a regulated activity in the United Kingdom, or claim to do so, unless they are an authorised person or an exempt person. This is known as the general prohibition. Breaching it is a criminal offence under section 23, and agreements made in breach of it can be unenforceable.

Authorisation usually means holding a permission granted by the FCA, or by the PRA for firms such as banks and insurers. Exempt persons include appointed representatives, who carry on regulated activities under the responsibility of an authorised principal.

Explore the operations test

• Regulated activities →What counts as a regulated activity under FSMA and the Regulated Activities Order.
• Exclusions →How exclusions in the Regulated Activities Order can take an activity outside the perimeter.
• Payments and e-money →When payment and e-money services need FCA authorisation or registration, and the main exclusions.
• Trading without authorisation →The criminal, civil and commercial consequences of carrying on a regulated activity without permission.
• If you are inside the perimeter →Your options if you are inside the perimeter: direct authorisation, an appointed representative arrangement or a change of model.

What decides whether an activity is regulated?

Section 22 of FSMA and the Regulated Activities Order (RAO) set out what counts. In broad terms four elements have to come together before an activity is regulated:

• a specified activity, such as lending, arranging, advising or dealing, as listed in Part II of the RAO
• a specified investment or product that the activity relates to, such as a credit agreement, a contract of insurance, shares or units in a collective investment scheme
• the activity is carried on by way of business, which looks at things like regularity, scale and whether there is a commercial element
• it is carried on in the United Kingdom, which in some cases can include activities carried on from the UK for customers abroad

Even where all four are present, an exclusion in the RAO can take a particular activity outside the definition. Separately, an exemption can mean a particular person does not need authorisation for something that is still a regulated activity. Each exclusion and exemption has its own conditions, and the detail of those conditions is usually where the answer lies. Applying them to your own facts is what a written opinion does.

It is a question about each activity

The test does not ask whether your business as a whole is regulated. It asks whether each thing you do is a regulated activity. A business can carry on one regulated activity alongside many that are not, and a single regulated activity is enough to need authorisation or an exemption for that activity.

Permissions are granted activity by activity too, so a firm authorised for one thing is not automatically covered for another. The same business can get different answers for different revenue lines. A firm that lends to limited companies and also introduces customers to an insurer has at least two separate questions to answer.

Payments, e-money and cryptoassets

Payment services and electronic money are regulated under separate regulations rather than the RAO, with their own authorisation and registration routes and their own exclusions. See payments and e-money. Cryptoasset businesses are moving into a new FCA authorisation regime, which goes live on 25 October 2027. See cryptoassets.

How the rules apply to common business models

The same rules play out differently for a loan introducer, a lead generation business, a property syndicate or a software platform. The activity pages explain the questions each model usually raises and the points a solicitor will want to look at.

Your marketing is a separate test

Section 21 of FSMA restricts financial promotions made in the course of business. A business that does not need authorisation for what it does can still have a website, adverts or investor materials that need approval by an authorised firm or an exemption under the Financial Promotion Order. How the marketing test works and why the two tests are separate.

Common misunderstandings

When a written opinion helps

A written legal opinion applies these rules to your actual activities, contracts and money flows. It is worth considering when a bank, payment provider or investor asks you to confirm your position, when you rely on an exclusion, or when you are about to change what you do. How written opinions work