FCA: Consultants must ensure firms are authorisation-ready

Sheree Howard, FCA Executive Director of Authorisations, emphasized the demanding nature of the authorisation process, likening it to a marathon.

She highlighted the pivotal role of third-party compliance consultants in preparing firms, but stressed the importance of clear boundaries.

Howard stated that the FCA assesses the firm's competence, not the consultant's, and firms must be able to articulate their business model and operations in their own words.

She cited an example where an interview was rescheduled because a consultant was prompting their client, obscuring the firm's genuine understanding.

This led to a month-long delay and increased stress for the firm, even though it was eventually approved.

The FCA is vigilant in identifying situations where consultants become the dominant voice, whether in emails, meetings, or interviews, and will address these directly with senior management.

The core principle is that the firm's voice and understanding must be paramount, ensuring they are genuinely ready for regulation.

Howard emphasized that good consultants hold their clients to high standards, even if it means difficult conversations or suggesting withdrawal as a strategic regrouping.

They must also take a long view, anticipating evolving regulatory expectations.

The FCA supports this by offering various services.

The Pre-Application Support Service (PASS), launched in August 2025, provides early assistance, with the first two firms authorized on day two of the regime.

Other resources include the Appointed Representatives regime, webinars for the upcoming crypto regime (opening in September), and the Regulatory Sandbox, which now assigns dedicated authorisation case officers.

Early engagement with these services is encouraged, as it leads to better applications and faster decisions, though they are not a substitute for a firm's own diligent preparation.