FACTSHEET

FCA Licence Options

For Investment Firms Call us on + 44 (0) 20 3457 3181 or
email info@compliancy-services.co.uk

This factsheet has been prepared to assist firms planning on applying for FCA Authorisation to establish key information relating to their proposed application. However,
some simplifications have been made to complex rules and there are a number of options available. Always check your own circumstances with an expert.

FCA Description FCA Fee Regulatory Capital Typical Business Models Comments
Section 1. Investment Advisors, Investment Managers, Brokers and Dealers
Higher of £20,000 • Regulatory Capital is dependent on
Personal Investment or a number of variables and PII
1 Firms (Article 3 MiFID £1,500 5%/10% of regulated income. • Independent Financial Advisors terms
Exempt) • Can only pass orders to specific
Minimum £20,000 firms including MIFID firms
Typically, higher of £10,000 but could be up to
£100,000
• May control but not hold client
or • Corporate Finance Advisory only
Other Article 3 MiFID money
2.a £1,500 12.5% or 25% of fixed annual costs, where firm
exempt • Can only pass orders to specific
applicable • Advisers and/or arrangers only
firms including MIFID firms
Minimum £10,000 - £100,000
• Investment Advisor and Arranger
€50,000 • Corporate Finance firms not • Applies to retail and professional
2.b Exempt CAD £1,500 or permitted to carry out the placing clients
£5,000 + PII activity
• Investment research firms
Higher of €50,000 • Brokers/Dealers ‘Dealing as Agent’ • May control but not hold client
or or executing orders under a power money
3. BIPRU £1,500 25% of fixed annual costs of attorney • For authorisations defined as
or • ‘Matched Principal’ not holding ‘straightforward’
Total of credit and market risk requirements client money

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FACTSHEET FCA Licence Options for Investment Firms

FCA Description FCA Fee Regulatory Capital Typical Business Models Comments

Minimum €50,000

Additional Pillar 2 capital may be required

dependent on risk identified by the firm
• Have discretion over client assets
and investments
• Also has the ability to advise
and/or arrange on investments
• Discretionary Investment
4. BIPRU £5,000 As above (3.) • May control but not hold client
Managers
money
• For authorisations defined as
‘moderately complex’

Higher of €50,000
or
25% of fixed annual costs • Additional regulatory reporting
• Firms carrying out the “placing”
or total of credit and market risk requirements required
activity and any other MIFID
5. IFPRU 50k £1,500 • May control but not hold client
activities but NOT Dealing on Own
Minimum €50,000 money
Account
Additional Pillar 2 capital may be required
dependent on risk identified by the firm
Higher of €125,000
or
• As for No 3. above but may hold
25% of fixed annual costs
Client Money or Safeguard Client • Hold client money and assets
or total of credit and market risk requirements
Assets • For authorisations defined as
6. IFPRU 125k £1,500
• ‘Matched Principal’ holding client ‘straight forward’
Minimum €125,000
money
Additional Pillar 2 capital may be required
dependent on risk identified by the firm
• Discretionary Investment
7. IFPRU 125k £5,000 As above (6.) • May hold client money and assets
Managers holding Client Money or

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FACTSHEET FCA Licence Options for Investment Firms

FCA Description FCA Fee Regulatory Capital Typical Business Models Comments
Safeguarding Client Assets • For authorisations defined as
Investment Advisor and Arranger ‘moderately complex’
• ‘Depo- Lite’ AIF Depositary –
subject to higher (£5k) FCA fee
• Firms acting as a Market Maker, or • An effective risk management
€730,000 + significant allowances for business dealing on own account, and function must be implemented
8. IFPRU 730k £5,000
risks Multilateral Trading Facilities
(MTFs, £25k FCA fee)
Section 2. Fund Managers – i.e. where the firm does not simply hold the portfolio management mandate under an Agreement with the operator of the Fund
• Can create and operate one or • Additional activities can be
According to IPRU (INV) 5 (minimum £5k); or more funds (“AIFs”) undertaken if required, for
BIPRU*; or IFPRU* • Assets in all AIFs managed must example, certain MiFID activities
be < €100M, or < €500M if such as advising, arranging and
9. Small Authorised AIFM £5,000
*See previous categories unleveraged and there are no managing investments (Small
redemption rights in first five AIFM BIPRU) and/or the ability to
years hold and control client assets and
money (Small AIFM IFPRU).
• May provide certain additional
Higher of €125k + 0.02% AUM over €250m MiFID services (advising,
or • Full Scope AIFM - can operate one arranging, managing investment
25% of fixed overheads; AIFMs must also allow or more funds (“AIFs”) and hold client assets and money)
10. Full Scope AIFM CPMI £5,000 for professional liability risks either wholly by • No limit on level of AUM • Significant rules on governance
additional capital or including PII insurance • Not available to an internally and compliance apply
managed AIFM • May also apply to manage UCITS
• Maximum AUM related capital
Minimum €125,000 €10m
• Significant rules on governance
Higher of €125k (€300k for an internally
• Full Scope AIFM - can operate one and compliance apply
managed AIF) + 0.02% AUM over €250m
or more funds (“AIFs”) • May NOT provide any additional
11. Full Scope AIFM CPM £5,000 or
• No limit on level of AUM MiFID services (advising,
25% of fixed overheads; AIFMs must also allow
arranging, managing investment
for professional liability risks either wholly by
and hold client assets and money)
additional capital or including PII insurance

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FACTSHEET FCA Licence Options for Investment Firms

FCA Description FCA Fee Regulatory Capital Typical Business Models Comments
• Maximum AUM related capital
Minimum €125,000 €10m

Higher of €125k + 0.02% AUM over €250m

or • Relatively unusual for a start-up
12. UCITS ManCo £5,000 25% of fixed overheads Manager of a UCITS fund investment manager to manage
its own UCITS fund
Minimum €125,000

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