Understanding and applying to the FCA for a Variation of Permission, known in short as VoP, has been a cause of confusion and embarrassment for one firm in particular of late. While we don’t like to point fingers, we would like to highlight the importance of submitting a properly considered and prepared application to ensure your business avoids being named and shamed by the FCA at some point in the undetermined future.
Put in laymen’s terms, a VoP, applies to authorised firms that want to change or add to their regulated activities. Simple right? You can easily review your firm’s permissions on the Financial Services Register. If you wish to fully understand the FCA’s definitions and requirements for Variations of Permissions, or you have a lot of time on your hands and enjoy reading lengthly documents, then Part 4A of the Financial Service and Markets Act (FSMA) will fully enlighten your legislation curiosity.
If you decided to skip Part 4A of FSMA, and want the VoP 101 lowdown, then read on. So, what changes or additions would require your firm to apply for new permissions, you ask?
A VoP also applies to FCA regulated firms, or dual-regulated firms, that want to:
You will need to apply for a variation of permission through the Prudential Regulation Authority (PRA) for the above stated activities.
Once you have carefully considered, prepared and submitted your VoP to the FCA, you can expect to wait between 1 to 3 months, maybe even up to six months, before being granted, or not, the permission/s you have applied for.
While you may find yourself chomping at the bit, it is important to note that your firm cannot start the required activities until the FCA have approved your application. If you do, you will be in breach of the FCA rules and the FCA may very well take enforcement action against you.
Apart from going ahead with un-regulated activities prior to receiving FCA approval. Which we do not recommend! Remember the firm we decided not to name and shame (the firm that inspired us to write this cautionary tale)?
That particular firm applied to the FCA for a variation to its Part 4A permission, but had not carefully considered or prepared their application.
The FCA published a Final Notice for the whole financial world to see, declining the firm’s permissions. The FCA noted that, ‘The firm’s contention that the proposed variation would not result in the changes the Authority has identified is wrong and indicates that the firm cannot be relied on to supply the Authority with accurate or reliable information relating to the matters in the Application.’
For all the details you can read the Final Notice here.
If in doubt, give us a shout! We are the only compliance consultancy in the UK to specialise exclusively in FinTech, meaning we understand your business, and your needs. Our dynamic team all hold industry qualifications and are up to date with the latest compliance regulations regarding all spheres of technology based, and alternative finance companies.
We can undertake a full review of your business model and current permissions. Should you require further permissions we can complete your application/s, ensuring all details are considered and correct – guaranteeing that you will NOT be named and shamed and have an embarrassing Final Notice published by the FCA about you!
Apart from applying for new permissions, if your firm stops a business line or wants to vary, reduce or restrict the scope of its permissions, we can help with that too. By reviewing your current business model and permissions we can aid you by applying to remove permissions you may no-longer require. Saving you FCA fees and ensuring you only pay for the permissions your firm requires.
Whether you require additional permission/s or the adjustment or removal of current permissions, it’s a win, win, with FinTech Compliance, we keep compliance simple!