New firm authorisation

Subject to any transitional relief, forms and templates applicable before 11pm Thursday 31 December 2020 should be read in conjunction with Supervisory Statement (SS) 2/19, which sets out how the PRA expects firms to interpret EU-based references in reporting and disclosure requirements and regulatory transactions forms.

Overview 

This information applies to new firms seeking authorisation from us, including banks, credit unions, insurers (general and life), and managing agents of a Lloyd’s syndicate. 

• Firms wishing to set up a new bank should refer to our New Bank Start-up Unit.
• Firms wishing to set up a new insurer should refer to our New Insurer Start-up Unit.
• Firms wishing to set up an insurance special purpose vehicle (ISPV) should refer to the Insurance special purpose vehicles page. This page also includes the relevant application forms for an ISPV.

A list of the regulated activities that are specific to firms that we authorise and regulate is available in the Financial Services and Markets Act 2000 (PRA-regulated Activities) Order 2013 Opens in a new window Opens in a new window.

Firms seeking authorisation to carry out any other activities should apply to the Financial Conduct Authority Opens in a new window Opens in a new window (FCA).

The pre-application stage

We find that meeting with prospective firms before they submit an application helps them to:

• understand the authorisation process and what happens at the various stages
• understand our expectations of firms, and in particular the PRA and FCA Threshold Conditions 
• identify any particular concerns that the regulators might have early on, and help firms make an informed decision about whether to spend time and money on an application that may not progress further
• submit as complete an application as possible.

However, there is no statutory requirement to meet us before submitting an application. An application can be submitted at any time, and we will use our statutory powers as set out in the Financial Services and Markets Act (FSMA) to reach a decision.

For firms who are new to the regulatory environment (such as start-up firms), we generally aim to meet three times with firms:

1. Initial meeting: This takes place after a firm submits its draft business plan. It provides an opportunity for firms to discuss their plan and ask the regulators (us and the FCA) questions about the authorisation process. The regulators will provide written feedback for the firm to respond to in its business plan.
2. Feedback meeting: This takes place after a firm has submitted – and we have reviewed – its updated business plan. We will again provide feedback, which the firm will be expected to address in its business plan.
3. Challenge session: This takes place just before a firm submits its application, with the aim of discussing its proposals in depth and with the regulators providing detailed challenge on the content of the firm’s near-final business plan. Firms will be expected to incorporate feedback from this session into their application.

Firms who have an existing relationship with us may not require as many meetings, and for small, less complex and established businesses we often find that one meeting achieves the aims as set out above.

Meetings are generally attended by both ourselves and the FCA and will typically be held at either the FCA’s or our offices in London. Exceptions will primarily be made for internationally headquartered firms. 

To initiate a pre-application meeting, we would expect as a minimum an explanation of why a firm wants to be an authorised entity and the initial business proposition and strategy including, but not limited to, the:

• business plan – what products will be offered, how they will be offered and the target market
• sources of funding – how the business proposes to fund its activities, and whether there are any investors and/or funding in place
• corporate governance – details of structure, board, senior management and governance arrangements, as far as they are known.

We may ask for further information, such as information on the proposed controllers if relevant.

To request a pre-application meeting, a firm that has an existing relationship with us should contact their relevant supervisory contact. For those new to the regulatory environment, please email NewFirmAuthorisation@bankofengland.co.uk. 

Pre-application: Lloyd’s managing agents

Firms applying as Lloyd's managing agents should have had detailed discussions with Lloyd’s before they submit an application to us. A pre-application meeting will depend on the specifics of the application, but it will usually involve Lloyd’s and the firm.

Pre-application: credit unions

We have specific requirements for credit union applicants’ business plans, which are set out in Credit union authorisation: supporting documents.

Submitting an authorisation application 

To submit an application, firms will need to follow the following steps:

• Firms will need to send an email with an electronic copy of their application to the PRA at the following mailbox: NewFirmAuthorisation@bankofengland.co.uk. 
• If the file size exceeds 25 MB please use multiple emails to accommodate your submission. 

Fee

The PRA and the FCA Regulatory Transaction fees for applications for new authorisations are payable in accordance with PRA Rulebook and FCA Fees and levies. The preferred method for payment is via BACS to the FCA who will provide a single invoice covering both the PRA and FCA fee.

Please make the payment to the FCA using the details below:

Account name: FCA Collection account
Bank name: Lloyds Bank
Account number: 00828179
Sort code: 30-00-02
Swift code: LOYD GB 2LCTY
Iban code: GB68 LOYD 3000 0200 8281 79.

When you make the payment, please reference it with the following: Title: ‘New authorisation application’ and the ‘firm name’ (name of the firm applying for authorisation).

Please then email your remittance advice and payment details to: fcafees@fca.org.uk and PRA-NewFirmAuthorisation@bankofengland.co.uk.

If you cannot make payment to the FCA using BACS.  Please contact NewFirmAuthorisation@bankofengland.co.uk for instructions on how to pay by cheque.

 

How we assess and determine applications

For an application to be considered as complete, it will need to include all of the required application forms, which have been fully and correctly completed. The information provided must be of sufficient quality and detail to allow us to complete our assessment. The application fee (as detailed above) will also need to have been paid.

Part 4A of the Financial Services and Markets Act 2000 (FSMA) sets out the requirements of new firm authorisations and the Threshold Conditions that firms must meet at authorisation and on an ongoing basis.

Our supervisory approach documents set out our policy on the matters that we consider when we decide whether to authorise a firm.

We will make a decision, alongside the FCA, on all applications within six months of receiving a complete application, or twelve months of receiving an incomplete application.  Authorisation will not be granted unless both us and the FCA are satisfied that it should be. If an application is unsuccessful, we will inform the firm about its options for challenging the decision.

Please note we may vary or cancel a firm’s permission if it does not start a regulated activity for which it has permission within 12 months of permission being given.