Richard Ellis writes for Finextra on when Fintechs do and do not require FCA authorisation
min readFintechs can often be reluctant to look into the regulatory status of their business, fearing that, if they do ask the question, they may get the ‘wrong’ answer (i.e. they may be told that they need to be authorised by the FCA).
Richard Ellis, Partner in our Financial Services Regulation & Funds team, warns in an article for Finextra, however, that while this reluctance is perhaps understandable, such an attitude is unwise. And, in many cases, FCA authorisation is in fact not required (dependent on the type of business in question).
In the article, Richard explains that "the consequences of breaching financial services regulation can be severe. In addition to the costs of bad publicity and business interruption, the potential penalties include significant fines and even imprisonment. The downsides of getting the ‘wrong’ answer may therefore be considerably outweighed by the downsides of not asking at all, and of inadvertently committing a criminal offence as a result."
Richard goes onto provide guidance to Fintech businesses considering this issue:
- How do you establish whether or not FCA authorisation is required?
- Does your business model need to be restructured at all to bring it out of scope?
- Applying for FCA authorisation in manageable steps, and making use of the FCA's Innovation Hub
- An explanation of why FCA authorisation is not always required
Read the full article in Finextra here.
