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Fintech Start-ups: Are you ready willing and organised?

Ok – so you have your business idea, you’ve done the groundwork, putting in the hours day and night, maybe even around your current job to really get your business up and running. You’ve been looking for investment, securing partner contracts, and potential clients to service – and then you start looking into being FCA authorised.

Go on to the FCA’s website and one of the first things you might come across is their requirement for you to be “ready, willing and organised”. Reading the FCA’s very brief guidance on being FCA authorised and seeing first hand what’s required, you can be forgiven for not actually being ready, willing or organised.

So, what does the FCA mean and what do they want to see?

Be Ready:

A firm must ensure that it has in place appropriately skilled staff and operational infrastructure in order to commence trading at the point of being authorised. This includes your IT framework, premises and finances.

Finance is a tricky one for most start-ups and often a common dilemma – why invest money on tech, banking and staff if being FCA authorised is months away and you can’t actually trade until it’s granted? It also poses an issue when seeking investment capital commitments.

For the most part, the difficult answer is that unfortunately a lot of these costs will need to be fronted early on.

The FCA expect you to get your business in line before providing financial services to the market you are operational in – and no start-up should ever expect to be FCA authorised without having their house in order first.

This may mean putting a considerable front up cost to kick start the business. That being said – these are some of the things that you can get away with:

  • Have your critical outsourcing agreements in place – but not needing them to be live yet and incurring the maintenance costs. For example, your:
    1. Client bank account: Most bank accounts will only issue a segregated client bank account once you have authorisation anyway.
    2. Tech: If you are white-labelling your tech solutions, then creating BETA versions ahead of the live version. At application stage, the FCA will expect to see all the details of the tech and these will need to be in place before being authorised and going live.
    3. PII: You can get a quote but it doesn’t need to be active before authorisation.
  • Capital resource requirements – if you need a certain amount in your account for capital resource requirements, the FCA will often allow this to be transferred close to the date of authorisation. The amount you will need to evidence varies depending on your activities.
  • Funding required to operate your business – as with many start-up fintech businesses, the ability to make a profit often comes a few years later, and so the firm will be operating at a loss. The FCA expect you to show how these losses will be funded, and you will need to pass the ‘cash flow test’ and ‘balance sheet test’, as well as showing that you have adequate resources.


FCA applications should be treated very seriously and you should be open, upfront and proactive in any dealings with the FCA.

The FCA would have also expected you to do your research, understanding not only the activities you will be undertaking but the rules and regulations which you will be governed by. Often for firms, this is the last consideration on their mind however advice on what sections of the FCA sourcebook or regulations applicable to you is very important. Thistle are able to help on this front and offer professional compliance support to a number of firms across a host of financial services markets. This can include mapping your activities or consulting on your business structure and what may be the best route to market.


Applicant firms should ensure that they have everything ready to essentially go live so that if they were FCA authorised today, they would be able to carry out the regulated activity. Careful consideration should therefore be given to anything left outstanding that may prevent the applicant firm from undertaking the activity.

Some of the questions to ask here are: How are you able to demonstrate adherence to points 1 and 2 above? Do you have all your compliance policies and procedures in place? Are your staff trained and have you communicated all our policies to your staff?  Again, Thistle are able to assist in providing a comprehensive compliance suite of policies that cover off all regulatory requirements, as well as online training facilities to help bring staff up to date with requirements.

How can Thistle help you?

If you are a start-up firm seeking FCA authorisation, the process can seem overwhelming and daunting. Thistle are here to help break down the process, advise on your business model, the required permissions, can provide application documents that we have created robust templates for incorporating previous FCA feedback, compliance policies and can walk you through every step of the application, including post-submission and the rounds of questions that firms often face when going through authorisation.

Contact us today on or call 0207 436 0630.