Financial Service

Financial Service

The information below will be of interest to anyone considering:-
*Unit Trust, formation, management, administration or marketing
*Dealing / organising of securities and most investment investments, including insurance products (buying, selling etc.)
*Accepting deposits
*Issueing e-money
*Property transactions
*Financing

Firms and individuals must be authorised by the Financial Conduct Authority (FCA) to carry out regulated financial service activities and / or offer credit to consumers. However, authorization is not needed for Introducers or Overseas Persons, which are shown as examples for exclusions from the need to obtain authorization for the activity.

It is our view that you should not take advantage of these exclusions because if you fully comply and obtain authorization you will increase your value in the eyes of those that you deal with. It is a real plus to be regulated by the FCA and the cost of compliance is not too high.

Please take the time to read through the material below that has been taken from the government website, with some simple comments from us added. It includes some sample pricing. The appropriate structure for applications for these services should include a Private Limited Company as shown under our HOME label above as the applicant.  

LET US HELP YOU GET THIS ORGANIZED!

“The Financial Services and Markets Act (FSMA) says any firm or individual who carries out a regulated activity in the UK must be authorised or registered by them, unless they are exempt.

Overview

Firms and individuals must be authorised by the Financial Conduct Authority (FCA) to carry out regulated financial service activities and offer credit to consumers. 

Regulated financial activities

Regulated activities relate to investments specified by the Treasury or to property, and include:

  • dealing with investments (buying, selling etc) or offering or agreeing to do so, and in the case of insurance contracts, carrying out the contract

  • arranging investment deals

  • accepting deposits

  • asset administration and safekeeping

  • investment management and advising on investments

  • creating, running or winding up collective investment schemes

  • computer or web-based investment transactions

  • dealing in securities – eg stocks and shares (or certificates representing them), or options and futures

  • dealing with debentures, bonds, loan stock etc, including government bonds

  • collective investment scheme units

  • dealing with insurance contracts

  • Lloyd’s syndicates

  • loans secured on land and other arrangements involving land

The following activities are taken to be part of the above list and are included in the list of services requiring either AUTHORIZATION or coverage by REGISTRATION:

  • accepting deposits

  • issuing e-money
  • carrying out or helping to administer insurance contracts (as a firm’s principal)

  • investments: dealing in or managing (as a principal or agent), arranging deals, safeguarding and administering, advising

  • home finance: arranging, advising on, entering into and administering

  • operating a multilateral trading facility

  • sending dematerialised instructions (electronic transfer of title in investments like securities and contractually-based investments)

  • setting up collective investment schemes

  • setting up stakeholder pensions schemes

  • providing basic advice on stakeholder products

  • Lloyd’s market activities

  • entering funeral plan contracts

  • agreeing to do most of the above activities

The application fee you will have to pay depends on whether your application is:

  • straightforward (£1,500)

  • moderately complex (£5,000)

  • complex (£25,000)

    Most financial advisers, mortgage brokers and general insurance intermediaries will be straightforward applications. “

There is then a very complicated annual fee schedule, which varies immensely depending upon the classification and volume. We suggest that you allow £1,000 for a basic type of activity with low volume.

Once authorization or registration is achieved you have a Financial Structure in the UK that is superior to those available in other countries and very widely accepted by Banks and investers around the world.

Registration will cost you less than authorization. In addition, the compliance requirements are lighter.

THE FSA says the following about Registration

Some firms may only need to be registered rather than authorised. This usually means they are run in a lower-risk environment, so we do not need as much detail about their business or protect the funds they receive from customers for payment services.

Registered firms or societies include:

  • some payment services providers

  • e-money institutions

  • some friendly and registered societies (co-operative societies, community benefit societies, and societies previously referred to as industrial and provident societies)

  • consumer buy-to-let firms

  • working men’s clubs

Exemptions and exclusions

Some types of company and individuals might not need to be authorised. These are:

  • appointed representatives (agents for the authorised principal firm)

  • professional firms – like solicitors, accountants or actuaries – that run regulated activities alongside their main business

  • local authorities or some housing groups that run insurance mediation or mortgage activities.

Exclusions are conditions that turn normally regulated activities into unregulated ones. So if you rely on an exclusion, you won’t need authorisation to do it.

Examples of exclusion include:

  • introducer exclusion

  • overseas persons exclusion

While these 2 items in green will be viewed very favourably by persons overseas, I would like to caution that in practise UK service providers in these regulated fields will most often not pay introducers and overseas persons fees of any description unless you are at least registered and compliant. The reason for this is that unless you are registered and complying with all the due diligense requirements for the prevention of money laundering and other legislated requirements the supplier has additional risk themselves that they do not want to ‘overlook’.

Firms and individuals must be authorised by the Financial Conduct Authority (FCA) to carry out regulated financial service activities and offer credit to consumers. However, authorization is not needed for Introducers or Overseas Persons, which are shown as examples for exclusions from the need to obtain authorization for the activity.

It is our view that you should not take advantage of these exclusions because if you fully comply and obtain authorization you will increase your value in the eyes of those that you deal with. It is a real plus to be regulated by the FCA.