Variation of permission

A firm authorised by the Prudential Regulation Authority (PRA) must apply for a variation of permission if it wants to change the activities it carries out. 

Overview

A firm authorised under Part 4A of the Financial Services and Markets Act 2000 (FSMA) has a single Part 4A permission granted by the PRA or the Financial Conduct Authority (FCA). This permission includes a description of the activities the firm may carry on (including any limitations), the specified investments involved, and, if relevant, any requirements. A firm is prohibited from carrying on a regulated activity in the UK (or purporting to do so) otherwise than in accordance with its permission.

If a firm decides to do any of the following, it should review its Part 4A permission and decide whether it needs to vary it:

  • start a new line of business
  • undertake a new regulated activity
  • extend a business line into a new product or to a new class of people.

All regulated activities are defined in the Regulated Activities Order.

Part 4A of FSMA sets out the requirements of variations of permissions and the Threshold Conditions which must be met at authorisation of the activity and on an ongoing basis. Our approach to banking supervision and approach to insurance supervision set out our policy on the matters that we will consider in respect of the Threshold Conditions when we decide to grant permissions.

Variation of Permission FAQs

What is a Variation of Permission (VoP)?
The business that a firm carries on, which is regulated by the PRA or FCA, is shown on the firm's entry on the Register (under the heading 'Permissions'). If a firm wishes to make any changes to its regulated activities that alter its permission on the Register, the firm must complete and submit a VoP application form.

What is a 'regulated activity'?
A business activity carried on by a firm which is regulated by the PRA and/or the FCA. If the firm has a Part 4A permission, its regulated activities are listed in its Scope of Permission Notice and on the Register. For further information about regulated activities, see the Regulated Activities Order (RAO).

Which regulator should a firm apply to (PRA or FCA)?
Dual-regulated firms must apply to the PRA for a change in permission for any of the regulated activities in the RAO. In addition, firms prudentially regulated by the FCA must apply to the PRA for a change in permission to add any PRA regulated activities in the RAO (accepting deposits, effecting or carrying out contracts of insurance, or managing the underwriting capacity of a Lloyd’s syndicate as a managing agent at Lloyd’s). Firms should apply to the FCA if they are an FCA-only regulated firm and they wish to carry out any other regulated activity.

Do I need a pre-application meeting?
If the proposed variation is a substantial change to the firm’s business model (such as adding deposit taking as a new activity) a pre-application meeting may be advantageous for both the firm and the regulators. Please contact your normal supervisory contact if you believe a discussion about the proposed change may be of value.

How do firms pay the application fee?
The application fee can be paid by:

  • credit or debit card, with details of:
    a. the amount of payment;
    b. card type (for example Visa, Mastercard, Switch, Delta);
    c. card number; and
    d. expiry date.

Note there will be a 2% surcharge on credit card transactions.

Cheque made payable to the Financial Conduct Authority. The FCA is responsible for fee administration.

The PRA does not charge a fee for applications to reduce a firm's permitted business activities.

What happens if a firm needs a VoP by a specific date?
Inform the PRA when submitting the application. If the PRA has any further questions and/or requests for information, the firm is asked to reply as soon as possible. Where possible the PRA will process the application by the requested date.

What do the terms valid/invalid mean for a firm’s application?
The PRA will only treat a firm’s application as 'valid' once both the VoP application form and the full application fee (where an application fee is payable) have been received.

Who will assess the application?
When an application is received, it will be assigned to a supervisor or case officer who will contact the firm within ten business days. The PRA will lead on the application and both the PRA and the FCA will assess the application. The firm is dual regulated so both regulators will work together on what needs to be assessed for their own objectives. The PRA is the lead regulator even if the firm is requesting the removal of all PRAdesignated activities.

Adding investment business: A firm wants to advise on/arrange investment business. What should it do?
Firms wishing to conduct investment business must complete and submit a VoP application as below:

  • Dual-regulated firms must apply to the PRA for a change in permission for any regulated activities including investment business.
  • FCA-only regulated firms applying to undertake investment business should apply to the FCA.

A firm is FCA-only regulated and wishes to apply to deal in investments as principal. Who should it apply to?
The PRA is responsible for the prudential regulation of certain, very significant, investment firms with permission to deal in investments as principal. An investment firm applying to deal in investments as principal should, however, initially apply to the FCA for authorisation. If the PRA identifies that the firm may in future be designated, the FCA will involve the PRA in the determination of the application.

What does a firm need to do to change its legal status?
If a firm is regulated by the PRA and wishes to change its legal status, for example from being a partnership to a limited company, it must apply to the PRA for authorisation for the new legal entity. The firm should contact its supervisor in the first instance to discuss how to proceed.

How to apply for a variation of permission

Dual-regulated firms must apply to the PRA to vary their permission.

Firms must complete and submit their variation of permission application using the Connect system. This system is owned and maintained by the FCA, but all relevant applications will be directed to the PRA. There may be a fee payable for the application, details are included within the Connect system.

Apply for a variation of permission

Credit unions may apply to amend their permission via paper application form. Credit unions may wish to engage with their supervisory contact to discuss the application before submitting the form.

WordVariation of permission application form: credit unions

Firms should refer to the PRA Rulebook to determine the relevant fee for their application.

You can pay the application fee by sending a cheque to the PRA made payable to the Financial Conduct Authority (as the fee administrator) to PRA Authorisations, Authorisations Division, Prudential Regulation Authority, 20 Moorgate, London EC2R 6DA.

The PRA and FCA will determine all applications within the earlier of six months of receiving a complete application or twelve months of receiving an incomplete application.

If the application is granted, we will send a written notice to the firm. If the application is not successful and the PRA and/or the FCA propose to refuse it, the PRA will inform the applicant about the various options for contesting the decision.

If at any time during the authorisation process the applicant wishes to withdraw its application, it may do so. The application fee is not refundable.

MiFID II implementation - structured deposits

MiFID II is part of a legislative package comprising the Directive, MiFID II (2014/65/EU), and the Markets in Financial Instruments Regulation (2014/600/EU) (MiFIR). 

MiFID II applies from Wednesday 3 January 2018 when it replaces the current MIFID I regime. 

The PRA consulted and published its final policy in Policy Statement (PS) 29/16 ‘Implementation of MiFID II: Part 1’  and PS9/17 ‘Implementation of MiFID II: Part 2’. Solo regulated Financial Conduct Authority (FCA) firms should refer to the FCA’s website.

Activities in relation to structured deposits

From 1 April 2018, dual regulated firms wishing to perform regulated activities in respect of structured deposits must follow the variation of permission application process and apply through the Connect system. 

EEA firms

From 1 April 2018, EEA firms wishing to perform regulated activities in respect of structured deposits must follow the variation of permission application process for a ‘top-up’ Permission. Please see the Passporting FAQ for more information on the process.

Privacy notice

How we use your information

Information we collect

Through our authorisations forms, the Bank of England (the ‘Bank’) collects personal data about you. This personal data could include (depending on the application or notification form submitted) personal identification details, contact information, addresses, employment history and information relating to fitness and propriety such as criminal, civil and regulatory matters. Each form clearly states what personal data is being gathered. The Bank may make further enquiries and seek similar information from third parties and other data sources as we think appropriate to identify and verify information that we consider relevant to the application or notification, this could include criminal, credit and other background checks.                                                                                               

Why we need your personal data

The Bank collects personal data to process a range of authorisation applications and notifications, which include:

  • New firm authorisations
  • Senior Management and Senior Insurance Management Functions
  • Waivers and Modifications of rules
  • Variations and cancelling of Permissions
  • Change in Control
  • Standing Data
  • Passporting

This information is used to assist the Bank of England in discharging its functions, in particular the statutory functions of the Prudential Regulation Authority under the Financial Services and Markets Act 2000 and other relevant legislation.

What we do with your personal data

In complying with applicable laws and for law enforcement purposes, we may disclose information to any government entity, regulatory authority or to any other person the Bank reasonably considers necessary. This may mean that personal data is transferred outside the European Economic Area. Otherwise, we will not disclose your information without your permission. Your personal data will be retained in accordance with the Bank’s records management schedule. 

Your rights

You have a number of rights under data protection laws.  For example, you have the right to ask us for a copy of the personal data the Bank holds about you. You can also ask us to change how we process or deal with your personal data, and you may have the right in some circumstances to have your personal data amended or deleted. To contact us about those rights, including making a request for the personal data we hold about you, or to find out more about privacy and data protection at the Bank, please see the Privacy and the Bank of England page.

This page was last updated 18 May 2018
Was this page useful?
Add your details...