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How to Become FSA Authorised

The Financial Services Authority (FSA) is a non-governmental body which operations with statutory powers given under the Financial Services and Markets Act 2000. They are accountable to Treasury Ministers and regulate financial services markets, exchanges and companies. As they set the standards that the market must meet and can take action against any person or business who does not meet those standards, it’s important to know if you or your business needs to be FSA authorised.

If you are setting up a business that includes intermediaries selling investments, any type of home finance activities or general insurance, then you must be FSA authorised. The full list of 21 activities that require FSA authorisation can be found at FSA.gov.uk (fsa.gov.uk/pages/Doing/Do/index.shtml).

How to Get Authorised

To get authorised by the FSA, companies and individuals have to submit an application to the FSA. The Application Packs are available from the FSA website and differ depending on the business sector you are operating in. Packs are available for retail intermediaries, wholesale investment firms, insurance firms that are not retail intermediaries, credit unions, companies undertaking Sale and Rent Back activities, Electronic Money Institutions, Payment Institutions, Mutuals and other provider firms and deposit takers.

Application Pack

The Application Pack asks the company to prepare and collect supporting documents such as a staff organisational chart and a copy of the company’s Professional Indemnity Insurance Quotation. Financial information including an opening balance sheet, a forecast closing balance sheet, a monthly profit and loss account for the first year of trading and the latest annual accounts also need to be presented.

Sole Traders

If you are a sole trader you need to include details of your personal and business assets and liabilities.

Partnerships

If you are trading as a partnership, your application needs to contain a copy of your partnership agreement deeds along with details of each partner’s business and personal assets and liabilities.

Limited Liability Partnerships

For Limited Liability Partnerships, a copy of your Limited liability partnership agreement is required along with proof of capital.

Limited Company

Limited Companies need to provide a copy of the 88(2) form, which is the Companies House Return form showing allotment of shares.

Final Word

The activities which require a business to be FSA authorised are detailed in The Financial Services and Markets Act 2000. But for ease of reference, companies can seek advice directly from the FSA. There is lots of useful information on their website, fsa.gov.uk which provides guidance along with contact details if any questions remain unanswered.

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