How does the FCA perimeter work?

Most of the questions we hear start in the same place: does this business need to be authorised? The answer depends on a small number of legal ideas that are easy to misread. They include what the perimeter is and who draws it, how exclusions differ from exemptions, and how much weight the FCA’s own guidance carries. The guides below take those ideas one at a time.

The guides

• The FCA perimeter explained →What the FCA perimeter is and how the boundary is drawn.
• Exclusions vs exemptions →The difference between exclusions, exemptions and exempt persons.
• What is PERG? →What the FCA Perimeter Guidance manual is and how to use it.
• Authorisation vs appointed representative →The differences between becoming an appointed representative and applying for your own authorisation.
• Can the FCA tell me if I am regulated? →What the FCA will and will not tell you about whether your business is regulated.

Start with the two tests

Every perimeter question splits into two separate tests. The first is about operations: whether what you do is a regulated activity under section 19 of the Financial Services and Markets Act 2000 (FSMA) and the Regulated Activities Order, or whether an exclusion or exemption applies. The second is about marketing: whether the way you promote your business is a financial promotion under section 21 of FSMA and, if so, whether it needs approval or falls within an exemption in the Financial Promotion Order. Passing one test does not clear the other.

Do I need authorisation? covers the operations test. It explains the general prohibition, what counts as a regulated activity, how exclusions work, the separate regimes for payments and e-money, and what can happen to a business that trades without permission.

Financial promotions covers the marketing test. It explains what a financial promotion is, how section 21 approval works, the main exemptions and how the rules apply to fundraising, social media and firms based outside the UK.

Looking for your business model?

If you already know the kind of business you run, the activities section looks at common models one by one. It covers business lending, loan introducers, commercial finance brokers, lead generation, investment introductions, property schemes, fintech platforms, buy now pay later, insurance introductions and cryptoassets. Each page explains the rules that usually decide the answer for that model, the common misunderstandings and the questions a solicitor is likely to want to look at.

How to use these guides

The guides are general information about UK law and FCA guidance as at the date shown at the top of each page. They are written to help you understand the rules and have a more useful conversation with a solicitor or specialist. They are not legal advice, and they deliberately do not try to give you a yes or no answer for your own business.

That is not caution for its own sake. Perimeter questions usually turn on detail: the exact wording of an agreement, who your customers are, where money flows and what your website says. Two businesses that sound alike can land on opposite sides of the line. A written legal opinion from a solicitor applies the rules to those details and records the reasoning, which is what a bank, investor or partner may ask to see. How written opinions work

If you are not sure which questions apply to you, a short call can help. Your first call with us is not charged and carries no obligation. We can talk through whether a written opinion would help and who could provide it. Our perimeter calls and introductions are not FCA regulated services and we do not give legal advice ourselves. Our regulatory status