The UK Financial Conduct Authority (FCA) today published the responses to unanswered questions from its Annual Public Meeting 2021. The list of such questions includes one concerning the slow processing of retail broker license applications.

The question is:

“We see that obtaining licenses for trading companies that are working with retail investors are pretty tough. The whole process takes 1-5 years. Is there any chance it could be faster?”

In response, the FCA explains that it has service standards in place, which it measures itself against and reports on its website. Complete applications should be decided within 6 months, which the regulator achieved for 98.7% of applications in 2020/21. Incomplete applications should be determined within 12 months.

However, according to the regulator, many of the applications it receives are incomplete.

The FCA states:

“We encourage firms to help us by helping themselves by ensuring applications contain all the relevant information and are not missing any supporting documents, as missing information is one of the causes slowing decisions. We are also looking at whether there are opportunities for greater automation for some elements of the authorisation process. This includes work to ensure we receive complete applications on submission”.

In the meantime, the regulator is recruiting additional staff, which will help it to allocate and determine applications more quickly, and to operate a tougher gateway. In his speech in July, FCA’s chief executive, Nikhil Rathi, explained:

‘If you let a bad firm or individual into the system, it takes up the time of supervisors and enforcers, and it risks the savings, livelihoods and health of consumers. Just one decision at the start – not letting them in – could prevent all that. It is to manage this risk that I appointed a new Executive Director, Authorisations, Emily Shepperd, who has significant operational leadership experience, and why we are recruiting around 100 additional authorisations colleagues.’

In addition to this, the FCA provides support to innovative firms that may seek authorisation or that wish to test new ideas through the Innovation Hub.