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The FCA expects applicant firms to actively participate in the application process. No consultant or advisor can completely substitute for that. We will provide drafts but you will also need to take time to examine your submission and responses to the application questions and consider what governance arrangements must be in place.

Any submission needs to be bespoke to your business model, articulating your knowledge and experience of payment services and evidencing that you have sufficient capital (if required for your application) and you are complaint with Regulation 6 of the Payment services regulations 2017 (PSR’s).

It is the expectation of the FCA that applicant’s complete applications for authorisation only with the assistance of compliance advisors. They do not expect to receive documents that are merely ‘signed off’ by applicants. If the applicant cannot answer the questions in the application form without an advisor answering for them, the FCA has to question the overall suitability of the applicant. Of course, standardised compliance templates may be utilised and Hirett will provide them for you but it is expected that the content should reflect the nuances of the applicant firm. Culture is at the heart of how the FCA authorises and supervises firms. When the FCA receives your application and throughout their assessment of it, they will consider whether you are ready, willing and organised to comply, on a continuing basis, with the requirements and standards under the regulatory system.

Your head office is considered in terms of substance rather than form, the FCA case officer will have to determine whether they have appropriate oversight and regulatory reach over the firm and key individuals and where is the location of a firm’s central management and control (‘mind and management’). This includes where decisions are made and where is its central administrative functions such as risk, compliance, IT, and internal audit are located, as well as the extent of where any outsourcing / 3rd party arrangements are. Be mindful that the FCA must be able to use its resources in the most efficient and economical way (Regulation 106(3) of the PSRs 2017). Considering this, supervising a firm at a home address adds complications. If you are going to acquire rental office later, be clear about when you expect this arrangement to be in place. Also, provide the particulars of the lease and advise whether your office address confirms availability of private office space.

Firms must appropriately identify and manage the operational risks associated with its use of third parties (outsourcing), including undertaking due diligence. Your application must have specific details on how you intend to operate in terms of technology or in the open banking sphere. Regulated firms retain full responsibility and accountability for discharging their regulatory responsibilities (‘Important operational function’), see 3.39 & chapter 18 of the Approach document.

If your application relates to open banking, the FCA expects to understand how you are going to look after personal/sensitive data, what controls you have in place (or are already in place) to protect from fraud and money laundering and cyber-attacks plus how you are going to manage the relationship with your end customer, how you have considered your risks.

It is a requirement of the PSR’s (Payment services regulations) regulation 6(7) that those involved have both experience and knowledge in UK/EU payment services. The FCA needs to understand how this condition to operate a payment institution is satisfied. It is common with open banking related applications for individuals to come from a technological background. However, this is not the FCA’s sole interest, the FCA wants to understand that when you configure your systems, you are doing it from a perspective of understanding why and that you know about the impacts, and any resulting reporting or compliance notifications. Plus, the FCA wants to ascertain that you have your customers interest at heart, merely taking qualifications doesn’t illustrate compliance of the condition.

Ultimately the best tip to applying, is to ensure that you have answered the questions in the application and provided supplementing documents that add weight to your responses (or where the FCA asks for them). Lastly, the FCA needs to understand that you are fully aware of your responsibilities.