Navigating the Recent FCA Update on Authorisation Operating Service Metrics

Introduction

The Financial Conduct Authority (FCA) has recently updated their operating service metrics for authorisations timelines. In this blog post, we'll summarise the key points and explain how they may impact FinTech startups seeking authorisation and ongoing compliance support.

Key Metrics Update:The FCA has now provided metrics for Q1, Q2, and Q3 of 2022, as well as January and February 2023. Comparing 2021/22 to January/February 2023, we see an improvement with 12 Green metrics, 5 Amber, and 2 Red. The FCA expects to meet most targets by the end of March 2023.

Investment in Authorisations Division

The FCA continues its investment in Authorisations, having recruited 125 additional permanent colleagues. Caseloads have fallen by nearly 60% since December 2021, and enhanced triage processes are speeding up case allocation and determinations for straightforward cases.

Areas Not Meeting Target:The FCA has identified four areas not meeting targets in January/February 2023:

1. Approved Persons (Amber, but significantly improved)
2. Change in Control applications (now very close to target)
3. New Firm Authorisations (expected to meet the metric by the end of March 2023, barring regulatory reasons)
4. Payment Services and E-Money authorisations, registrations, and notifications (impacted by incomplete and poor-quality applications)

Challenges and Ongoing Initiatives

The FCA acknowledges that increasing complexity in some cases may prevent meeting targets. In such situations, additional time is needed for scrutiny and engagement. The FCA also notes a persistent issue with incomplete and poor-quality applications, particularly in Money Laundering Registrations, Payment Services Regulations, and Electronic Money Regulations applications.

To address these issues, the FCA has issued more detailed guidance for cryptoasset businesses and mortgage intermediaries and plans to enhance guidance for other areas. They are also testing a new digitised form for approved persons applications, which may become publicly available in the summer.

Future Reporting:Starting Q4 2023, the FCA will report operating service metrics performance quarterly and will include more detailed reporting on the time taken to process applications.

Conclusion

The FCA's latest update on authorisation operating service metrics highlights their ongoing commitment to improving the authorisation process. FinTech startups should take note of these updates and ensure their applications are complete and of high quality to facilitate a smoother authorisation process.

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