Harper James is a UK full-service commercial law firm advising businesses on the laws of England and Wales, and its practice breadth includes financial services regulation. FCA compliance requires a business to identify the regulated activities it performs, obtain the correct permissions, and maintain controls that meet the applicable rules in the Financial Conduct Authority (FCA) Handbook.
A business must establish whether its activities fall within a regulated activity under the Financial Services and Markets Act 2000. This assessment covers the nature of the service, the products involved, the customers served and the way the activity is carried out. Depending on the model, the business may need direct FCA authorisation, permission to vary its existing activities, or an appropriate exemption or appointed representative arrangement. Operating without the required permission can constitute a regulatory breach.
An FCA application normally requires information about the business model, governance, financial resources, controllers, senior managers, compliance arrangements and systems and controls. The FCA assesses whether the applicant satisfies its threshold conditions, including suitability, adequate resources and effective supervision.
An authorised firm must maintain governance arrangements proportionate to its activities and risks. These commonly include documented policies, compliance monitoring, risk management, complaints handling, financial crime controls, record keeping and regulatory reporting. Firms within the Senior Managers and Certification Regime (SMCR) must allocate prescribed responsibilities, maintain statements of responsibilities where required, and assess the fitness and propriety of relevant staff.
The FCA’s rules on systems and controls, commonly found in SYSC, require firms to manage conflicts of interest, protect client assets where applicable and maintain appropriate oversight of outsourced services. Anti-money laundering obligations apply to relevant firms under the Money Laundering Regulations. Firms serving retail customers must also assess whether the Consumer Duty applies to their activities and demonstrate that their products, services, communications and customer support produce the required outcomes.
FCA compliance is an ongoing process rather than a one-time authorisation exercise. A practical compliance framework starts with a regulatory obligations register, maps each obligation to an accountable owner, sets review dates and records evidence of testing. The business should monitor changes to the FCA Handbook, submit required returns, renew permissions or attestations where applicable, investigate incidents and retain records for the periods required by relevant rules.
Boards and senior managers should receive reporting that explains material risks, breaches, complaints, financial crime indicators, conduct outcomes and remediation work. Where a breach occurs, the firm should assess its effect, contain the issue, document the investigation and determine whether notification to the FCA or other action is required. The precise controls and reporting duties depend on the firm’s permissions, activities, customer base and prudential classification.