Saracens Blog

Financial law services and applying for FCA regulation/authorisation

Financial law services falls under the Financial Services and Markets Act which is a regulatory act that monitors all of the regulated financial law services in the UK. Anyone carrying out regulated financial activities in the UK must be authorised by the FCA or exempt (an appointed representative or some other exemption). Breach of this is may result in criminal conviction which carries a penalty of two years imprisonment and/or a fine.

To provide financial law services it must be established whether a proposed business requires it to apply for authorisation in order to engage in regulated activities. For smaller firms/businesses, this would usually include intermediaries selling investments and/or home finance activities and/or general insurance.

For each regulated activity it must be identified with which investment type its activities will be concerned with.

Financial law services may include the following services areas which would require a firm to apply for FCA authorisation:

  • issuing e-money;
  • establishing etc collective investment schemes;
  • providing basic advice on stakeholder products;
  • advising on investments;
  • advising on home finance activities;
  • entering funeral plan contracts;
  • entering into a home finance activity;

To apply for FSC authorisation a firm must submit an application to the FCA for their consideration. Dependant on the firm’s proposed financial law services, the application type will vary. These applications can be put together by referring to the FSC website which lists a set of criteria that must be adhered to if a firm wishes to be gain authorisation to provide a financial law services.

There are certain exceptions to the rule where a firm may provide financial law services, without have to be authorised by the FCA.

A person who is an appointed representative is exempt from authorisation and these include:

  • A professional firm (i.e. a firm of solicitors, accountants or actuaries) carrying on certain regulated activities that are incidental to its main business; or
  • A local authority or certain kind of housing body carrying on insurance mediation or mortgage activities

It must be noted that there are proposals to abolish the FCA in its current form and pass its powers onto the Bank of England. What this means for financial law services in the UK is yet to be seen but given the failure of the FCA with respect to the collapse of the UK economy, it may be one of the first actions implemented to help it recover.

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