Can the FCA tell me if my business needs authorisation?

What will the FCA not do?

The FCA regulates. It does not act as an adviser to individual businesses. As a rule it will not:

• give individual legal advice on whether your activities need authorisation
• provide a written confirmation, as a general service, that a particular business model sits outside the perimeter
• tell you how to structure your business so that it does
• approve your financial promotions, which is something authorised firms do

There are sound reasons for this. The FCA’s job is to apply and enforce the law. A view given on limited facts in a single conversation could easily be relied on far beyond what it was meant to cover.

What does the FCA publish?

The FCA publishes a great deal of general material. Its Perimeter Guidance manual, known as PERG, explains how it reads the legislation. It issues consultation papers, policy statements and finalised guidance on particular topics, such as FG24/1 on financial promotions on social media, published in March 2024. It has also published perimeter reports on issues at the edge of its remit. All of this explains the FCA’s view in general terms. None of it is a view on your business.

What is Innovation Pathways?

Innovation Pathways is an FCA service that helps regulated and non-regulated firms with innovative products understand which rules apply to what they are planning. The FCA is clear about its limits. It is not a replacement for legal advice or consultancy, and the FCA will not tell firms how to structure their business. Because it is aimed at innovative products, a business with a conventional model may find it is not the right route.

If your proposition is genuinely new, it can be a useful way to understand how the FCA is thinking about it. It does not replace an analysis of your own position. FCA Innovation Pathways

Is a call to the FCA contact centre a ruling?

No. The FCA’s contact centre can point you to information and explain how its processes work. A view given over the phone is general, depends entirely on what was said and how it was understood, and is not a ruling on your position. It is not a documented analysis you can show a bank or investor, and it would be unwise to treat it as permission to go ahead. If you do speak to the FCA, keep a note of what was said, but do not treat the call as settling anything.

What can you check yourself?

The FCA’s public tools are most useful for checking other firms. The FCA register shows whether a firm or individual is authorised, what permissions a firm holds, whether a business is an appointed representative and who its principal is, and whether a firm is registered or authorised under the payments or e-money regimes. The FCA also publishes a warning list of firms it believes are operating without authorisation or running scams.

These checks are worth doing before you rely on a partner, such as a lender you introduce customers to or a firm you ask to approve your promotions. Since 7 February 2024 an authorised firm generally needs a specific FCA permission to approve financial promotions for unauthorised businesses, so it is worth checking a firm’s permissions on the register before you rely on its approval.

What if the FCA contacts you?

If the FCA writes to you about whether your business needs authorisation, take it seriously and get legal advice before you reply. What you say can matter, and a solicitor can help you understand what is being asked and respond accurately. A call with us can help you work out who you need to speak to, but the reply itself is a matter for a solicitor.

Operations and marketing

The position is the same for both tests. The FCA will not tell you whether what you do is a regulated activity under section 19 of the Financial Services and Markets Act 2000, and it will not tell you whether your marketing is a financial promotion under section 21 or approve it for you. Approval of promotions for an unauthorised business comes from an authorised firm with the right permission, and exemptions come from the Financial Promotion Order. See the operations test and the marketing test.

Common misunderstandings

When a written opinion helps

For a documented view of your own position, the usual route is a written legal opinion from a solicitor with financial services regulatory experience. It applies the legislation and guidance to your actual agreements, processes and marketing, and sets out the reasoning and any assumptions. It can often be shared with a bank, investor or partner, on terms the solicitor agrees. Communications with a solicitor for the purpose of legal advice are usually covered by legal professional privilege, and the solicitor is regulated by the Solicitors Regulation Authority and accountable for the advice they give. How written opinions work and how we work with solicitors.