FCA Early and High Growth Oversight approach

May 11, 2022 12:00:00 AM

What has happened?

The FCA announced in April 2022 that, following a successful pilot with 32 newly authorised firms across a range of sectors between October 2021 and March 2022, it is expanding its Early and High Growth Oversight approach with a view to providing closer support for 300 newly authorised firms by the end of 2023.

What are the key points of the approach?

Recognising that firms can face challenges in meeting their regulatory obligations in the first few years after authorisation, the FCA has initiated the new Early and High Growth Oversight approach, which will provide enhanced supervision for firms as they get used to their regulatory status and will support them to understand their obligations so they can meet the standards expected as they grow. It will also ensure that the FCA can identify and address harm developing in newly authorised firms sooner.

The objectives of Early and High Growth Oversight are to:

Spot harm or misconduct,
Raise firms’ standards,
Promote competition, and
Provide better firm experiences

In 2022 and 2023, Early and High Growth Oversight will take in up to 300 newly authorised firms. Firms need not apply to be part of Early and High Growth Oversight as the FCA will contact them directly if they are included.

The pilot operation revealed a number of common themes among newly authorised firms, in a range of areas including;

Financial promotions,
Regulatory submissions,
Regulatory permissions,
Financial projections, and
Business model changes

Based on discussions with firms in the pilot, the FCA has offered some insights identified during the authorisation process. These are;

Before and during the authorisation process, firms should ensure they read all the relevant information and guidance that the FCA provides, for example portfolio letters or guidance relevant to the firm’s sector or business.
Firms should register for access to the FCA’s systems early on. This will ensure they are ready to submit their regulatory reporting on time. They should also familiarise themselves with their reporting schedule once it is available.
In Early and High Growth Oversight, the FCA expects firms to engage with the regulator openly and transparently and to notify it if it is likely that they will be unable to fulfil their regulatory obligations.

How can we help you?

If you’d like to know more about how we can help you with your post-authorisation compliance support, including Early and High Growth Oversight, or any other compliance support services, our specialist team is here to help.

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