March 2003
All persons must be authorised or approved by the FSA before they can carry on a regulated activity (see paragraph 80.6) unless they are exempt from regulation under the Act (see paragraph 80.5).
The FSA will only authorise those persons who satisfy the necessary criteria (the ‘threshold conditions’) to engage in a regulated activity. The threshold conditions are listed in Schedule 6 and include honesty, competence and financial soundness.
Notes: [Schedule 6]In authorising a person the FSA will grant that person, if the threshold conditions are met, permission to carry on one or more regulated activities.
Once permission is given, a person can apply to vary that permission, e.g. if a person wants to carry on another regulated activity. If a business is carried on without the required permission, the general prohibition has been breached and a criminal offence may have been committed (see paragraph 80.5).
Application for permission to carry on a regulated activity must be made to the FSA in such manner as the FSA directs. The FSA has six months to determine an application. The FSA has power to refuse an application for permission but a warning notice must be given to the applicant stating the FSA’s reasons for deciding to reject the application.
Notes: [Part IV] [s31(2)] [s51(3), s52(1), s52(7) and s52(9)]Permission granted by the FSA to carry on a regulated activity/activities consists of three elements:
A description of the activities the firm can carry on, including any limitations
The specified investments involved; and
Any requirements imposed.
80.12 Limitations and requirements
When the FSA grants permissions it is required to specify the permitted regulated activities for which permission has been given. The FSA may impose limitations on the regulated activity/activities, e.g. limit the number of customers a firm may deal with. The FSA may also impose a ‘requirement’ in connection with a permission, e.g. a requirement to submit financial returns more frequently than normal.
Notes: [s42(6), s42(7) and s43(1)]80.13 Permission granted pre- the Act
If a person was authorised under previous legislation to carry out a regulated activity, they are automatically given permission to carry on that activity in the United Kingdom. If that person wants to vary their permission, they must apply to the FSA for a variation.
Notes: [FSMA (Transitional Provisions) (Authorised Persons etc) Order 2001 (Statutory Instrument 2001 No 2636 (the Transitionals Order)]
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