Why Financial Preparedness Matters for FCA Authorisation

Seeking FCA authorisation is a pivotal moment for any firm operating in regulated financial services. But too many firms stall or are delayed due to sloppy, incomplete or inconsistent financial data. The FCA itself warns within its guidance  Preparing financial information for your application that “the financial information we receive with firms’ applications does not always meet our minimum standards, leading to delays.”  

To succeed, you must demonstrate that your firm is “ready, willing and organised” and a robust financial submission is one of the clearest signals the Applicant firm is serious and ready for FCA supervision.  

Core Requirements for Your Submission 

When preparing the Applicant firm’s application, the FCA expects a baseline level of financial data, regardless of the Firm’s size or business model. You should tailor the submission to your legal structure and sector, but do not omit the following essentials: 

Core Financial Documents (Minimum Expectations) 

• Three sets of financial statements
  For historical periods (if applicable): income statement (profit and loss), balance sheet and cash flow statement (e.g., FY2022, FY2023, and FY2024).
  If the firm has been recently incorporated and does not yet have three years of trading history, provide financial statements for the period since incorporation, along with financial forecasts to demonstrate future financial sustainability. 

• Historical accounts (if already operating)
  If the firm is incorporated and has been trading, provide up to three years of audited (or unaudited but appropriately prepared) accounts. 

• Forward-looking financial forecasts
  Forecast at least three years ahead (monthly and annual views are acceptable). Ensure: 

• Balance sheets balance; 

• Cash flows reconcile and link through; and 

• Opening/closing positions match across years. 

• Supporting notes, assumptions and commentary
  Avoid submitting numbers in isolation. Provide explanatory notes, management assumptions, stress testing, sensitivity analyses and contextual information so reviewers understand the basis of your forecasts. 

• Prudential regime compliance (where applicable)
  If the firm is subject to a prudential regime under the FCA Handbook (e.g., IFPR), include information on: 

• • Share capital structure; 

• • Term sheets; 

• • Capital instruments; and 

• Justification that these instruments meet the FCA’s criteria (e.g., per MIFIDPRU 3 for own funds). 

• Alignment with the legal entity
  All financial data must directly relate to the legal entity applying for authorisation. Group-level or partial data not attributable to the applicant entity may result in rejection. 

• Sector-specific templates
  Use the FCA’s Excel templates (e.g., for wholesale firms, financial advisers, payments/e-money/crypto, retail firms). These templates include guidance and glossary tabs, ensuring baseline regulatory requirements are met. 

• Supplementary documentation (if needed)
  Include additional documents to support your submission (e.g., detailed stress tests, liquidity buffers, capital adequacy breakdowns, figure calculations). 

FCA Expectations for High-Quality Financial Information  

Submitting well-prepared financial information is not merely a formality, it is central to the FCA’s assessment of whether your firm meets the statutory Threshold Conditions under the Financial Services and Markets Act 2000 (“FSMA”). 

Key rationales: 

1. Demonstrate readiness, willingness and organisation
   A clean, coherent financial submission shows that the firm is capable of handling complex regulatory requirements.  
2. Speed up the assessment and reduce delays
   Incomplete or inconsistent submissions cause delays, as case officers must seek clarifications. High-quality material allows smoother processing.  
3. Assess financial resources versus risk
   The FCA evaluates whether the firm has sufficient capital, liquidity and income to absorb operational and market shocks.  
4. Promote market integrity and consumer protection
   Firms with weak financial planning may pose risks to market stability and end clients.  
5. Enable consistency and comparability
   Standardised templates and consistent assumptions allow the FCA to compare applicants and detect anomalies efficiently.  

Best Practices: Tips to Prepare a Strong Financial Submission 

To maximise your chances of authorisation success, follow these essential practices: 

• Start early:  gathering historical accounts, refining forecasts and iterating assumptions takes time 

• Use the FCA’s templates faithfully: don’t deviate unless absolutely necessary and always annotate deviations 

• Validate internal consistency: verify that your cash flow links to your balance sheet, that capital injections or withdrawals reconcile across statements 

• Stress test and scenario-plan:  show upside/downside sensitivity (e.g. lower revenue, higher costs) and contingency actions 

• Ensure full alignment of the submitted financials with the legal entity: group-level or partial data can waste time or be rejected 

• Run consistency check sessions to spot mistakes, irregularities and inconsistencies. 

How Complyport Can Help 

The FCA authorisation process is complex, but it doesn’t have to be daunting. Complyport’s experienced regulatory consultants provide end-to-end support for firms seeking authorisation, including: 

• Preparing and reviewing financial forecasts and models; 

• Advising on prudential requirements (e.g. MIFIDPRU); 

• Supporting ICAAP or ICARA documentation; and 

• Managing regulatory engagement and application submission. 

Book a meeting with one of our Subject Matter Experts today and find out how we can support your authorisation journey. 

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