How do I become authorised?

You need to meet the Threshold Conditions, which are the FCA’s minimum standards for becoming, and remaining, authorised; see below.

The process of applying for authorisation requires the proper completion and submission of certain prescribed forms:

An applicant for Part 4A Permission, except in so far as the FCA may direct in individual cases, must apply in writing in the manner directed, and with the information required, in the application pack provided by the FCA

A MiFID investment adviser or investment manager will generally be a “wholesale investment firm” and should follow the FCA application pack process for that category. An AIFM under AIFMD will also need to follow the FCA’s specific process for AIFMs.

The forms required will include some or all of the following:

A core details form – this requires factual information about the business structure, controllers, management and personnel. Information on systems and controls, including business continuity is also required here

Supplement for investment managers – this covers the applicant’s regulatory business plan, its proposed customer types and investment strategy, and the scope of regulatory permissions required. This form also requires information on financial resources and cash flow projections, further detail on personnel and compliance arrangements

Forms for individuals who will be performing “controlled functions” (called Approved Persons; see below)

Owners and influencers appendix

Forms for controllers – persons who (broadly) hold or control 10 per cent or more of the applicant

IT Controls form – for those firms who are more dependent on IT systems, and

Supporting documents including org charts/ financial information / compliance procedures, etc.

For new applicants seeking authorisation as AIFMs, in addition to the requirements specified above, a firm applying to be an AIFM also needs to submit the following to the FCA:

The Variation of Permission (VOP) form which acts as a checklist of the AIFMD-specific requirements (see “What are the ongoing requirements for an authorised firm?” below) with further details where necessary. The VOP form includes information relating to: the FCA permission profile for the AIFM; the regulatory business plan; financial resources; conditions for authorisation; approved persons; AIFs and depositary arrangements

Schedule of AIFs – various details in respect of any AIF for which the firm is to be appointed as AIFM, including its name, constituting instruments (eg Articles of Association) and its investor disclosure document (prospectus).

See the FCA guidance on the wholesale investment firm application process on its website. And for the AIFM application requirements, see the FCA’s AIFMD website pages for further information and links to the forms.

For applicants which are limited liability partnerships (see legal entities, below) the FCA will need to see a signed LLP agreement before granting authorisation.

Most applicants use a compliance consultant or their legal adviser to manage the application process for them as this will make the process smoother for a first time applicant.

Hirett can give information on compliance consultants with whom we work frequently on request or can assist on your application if you prefer.