Update on FCA Authorisations operating service metrics

In October 2022 we published an update on our operating service metrics for authorizations timelines, which included a view of operating service metrics for the period April to September 2022.

The latest metrics, now show April to September 2022 as 2 separate quarters (Q1 and Q2) and include a performance for October to December 2022 (Q3) and January/February 2023. We are no longer reporting on the voluntary metrics for Approved Persons Status or Payment Services Agent notifications. As we said in the October 2022 update, these targets are no longer appropriate due to the additional checks at the gateway.

For 2021/22 there were 8 Green metrics, 5 Amber, and 6 Red. In January/February 2023, 12 were Green, 5 were Amber, and 2 were Red. We expect to see further improvement and to substantially meet the targets by the end of March 2023. (For metrics without cases in January or February 2023 we have used the most recent period with cases as the reference).

As reported in October 2022, we are continuing with our program of investment in Authorisations. We have now recruited 125 additional permanent colleagues (vs 95 in October). From their peak at 12,500 in December 2021, caseloads have now fallen by almost 60% to 5,500 and are approaching more sustainable levels. Our enhanced triage processes are reducing the time it takes to allocate a case to a case officer and allowing us to determine straightforward cases quicker. We are improving our communications with applicants, and we will further enhance this as our newly recruited colleagues gain experience.

Service metrics are a lagging indicator and so take time to show decisive improvement. As performance improves and we make determinations on previously aged cases this impacts the current reporting period. We continue to apply increased scrutiny at the gateway, including a holistic assessment of firms’ business models. In 2022/23 the number of firms not authorized continues to be 1 in 5, up from 1 in 14 in 2020/21. In some sectors, the number not authorized is considerably higher.

The areas not meeting the target in January/February 2023 were:

Approved Persons (Amber in January/February 2023 but significantly improved compared to 2021/22)
Change in Control applications (now very close to the target, 99.1% in January/February 2023. We have significantly reduced the time to allocate Change in Control notifications. We now allocate and begin work on Change in Control notifications within 3 days of receipt on average and expect to be allocated within 24 hours by the end of March 2023)
New Firm Authorisations (we expect to meet this metric by the end of March 2023, except for regulatory reasons as explained below)
Payment Services and E-Money authorizations, registrations, and notifications (where we are seeing incomplete and poor-quality applications)
As we noted in the October 2022 update, the increasing complexity of some cases means that we will not always meet the target. In these cases, additional time is needed for greater scrutiny or engagement for good reasons, for example where required to meet our objectives effectively. Also, decisions are sometimes delayed at the request of the applicant.

We still see incomplete and poor-quality applications. This remains a particular issue for Money Laundering Registrations, Payments Services Regulations, and Electronic Money Regulations applications. To improve the quality of applications we have issued more detailed guidance on our website for crypto asset businesses and mortgage intermediaries. We will continue to enhance the guidance to firms in other areas. We are also testing a new digitized form for approved person applications which if successful will be made publicly available in the summer.

We have proposed that from Q4 2023 we will report operating service metrics performance quarterly and will include more detailed reporting on the time taken to process applications.

Leave a Reply

Your email address will not be published. Required fields are marked *