This page gives information about our performance in a range of areas, both statutory standards (as set by The Financial Services and Markets Act 2000 (FSMA) and other legislation) and voluntary commitments. It covers 60 service standards on activities including dealing with regulatory applications, telephone enquiries and other correspondence. This page focuses on our performance for the period 1 April 2019 to 31 March 2020.
We describe our commitments in 3 sections, each of which relates to our Mission[1]:
- Open communication: We are committed to being as transparent as possible. It is important to provide appropriate information about our regulatory decisions, and be open and accessible to the firms we regulate as well as the general public. We reflect this by using standards, like the timeliness of our responses to consumers, firms, MPs and others.
- Enabling business: Our Approach to Authorisation[2] gives more detail to support our Mission. We want to make it easier for firms and individuals to work with us through the authorisation process. We do this by adopting a service mindset in our approach to authorisation, ensuring our decision-making is adaptive, transparent, timely and consistent. This is reflected by standards in this document on how promptly we authorise firms and individuals.
- Adapting to changes: We respond to requests to vary the way firms work, for example by varying regulatory permissions. Responding in this way ensures firms maintain regulatory standards, and allows us to deal with requests from firms and individuals efficiently. How we respond is reflected by standards on this page eg on how quickly we process requests for variation of permission.
Standards for the work of the FCA’s Listing Transactions functions are listed at the end of this page.
COVID-19
Due to the coronavirus (Covid-19) situation we have changed some of our processes to continue to meet our service standards. We have activated contingency and business continuity measures, and staff continue to provide the usual high level of service while working remotely. Examples of some of the changes we have made include:
- aiming to accelerate payment of all approved supplier invoices
- improving our remote working IT capabilities to continue to protect consumers, and ensure that financial markets work well and ensure firms can access our systems
- balancing our channel capacity by encouraging consumers and firms to email rather than call to help with reduced telephony capacity
Contents
Key Findings
- Some of the areas we have improved compared to last year are:
- responding to 98.7% of letters from firms within 5 working days, compared to 91.9% in 2018/2019
- increasing the satisfaction score for consumer correspondence to 80% (up from 78% in 2019 and 79.3% in 2018) and meeting our target for the first time in over 2 years
- Areas where we still need to improve are:
- The response rate for substantive replies to MP letters decreased this year. Our target is to respond to 80% of these letters within 15 working days and 100% within 20 working days. During 2019, our response rate within the 15-day timescale was 54.3% and this dropped to 49.7% in 2020 due to the increase in the number of letters received, up from 405 in 2019 to 482 in 2020, and in their complexity. While we responded to 240 MP letters within 15 working days in 2020, this increase meant our overall response rate dropped. Similarly, meeting our 20-day timescale decreased from 81.2% in 2019 to 78.3% in 2020.
- Our response rate when completing an investigation into a complaint. For complaints dealt with by the local business area, our target is to complete an investigation and send a response to the complainant within 10 working days. We have set a voluntary target of meeting this timeframe for 95% of cases. Again, there has been a sharp increase in complaint volumes which has challenged the team’s capacity to meet demand. As a result, we have seen a sharp decline in this standard, only achieving 79.1% in 2020 compared with 96.6% in 2019.
- The response rate to Freedom of Information Act (FOIA) requests. Our statutory target is to respond to 90% of requests within 20 working days and in 2020 the response rate dropped from 88.5% in 2019 to 84.6% this year. We received a total of 803 requests in 2020 (up 13% on the previous year’s total), resulting in some delays in responding in the second half of the year.
- To process an application for ‘approved person’ status for Customer Function (CF) and Significant Influence Function (SIF) roles. We saw a large decline in processing applications for CF and SIF roles within target, dropping from 83.9% in 2019 to 56.6% this year, which is below our voluntary target of 85%. This was due to a significant number of solo-regulated firm applications we received before the Senior Managers Regime for solo-regulated firms commenced. This level was over and above the expected level of conversion activity.
- To process a complete notification for appointed representative status. We also saw a decline in processing these notifications within target this year, dropping from 96.6% in 2019 to 84.2% this year. This means we have fallen below our voluntary target of 95%. The time taken to process appointed representative notifications was affected by the work to deal with the significant number of solo regulated firm-related applications we received before the start of the Senior Managers & Certification Regime (SM&CR) in December 2019, which was over and above the expected conversion activity.
- Overall, we achieved our SLA targets on 45 of our standards (75%) this year which is the same as in 2019. We have, however, seen an increase in the number of standards reporting below our minimum targets. In 2019, we had 2 (3.3%) standards reporting below our minimum targets compared to 7 (11.7%) in 2020. Our focus for the coming year will be to reduce the number of standards that have fallen below the minimum targets.
Chart tips: hover over data series to view the data values and filter the data categories by clicking on the legend.
Open communication
As a public interest body, transparency is critical to how we operate. We communicate with firms and consumers in a variety of ways, with audiences ranging from MPs and firms, to consumers and the wider public.
Standards
Supervision Hub (formerly known as Customer Contact Centre)
Our Supervision Hub[3] is our first point of interaction with firms and consumers, and includes our dedicated consumer and firm helplines as well as providing email and online communication channels. We are committed to being available to provide online and telephone help when it is needed. We regularly review the queries we receive and update our website to allow firms and consumers to self-serve where they can.
We aim to provide a prompt and high-quality service. If we cannot provide a conclusive response within our target timescale, we keep individuals updated with our progress. We use customer satisfaction research to assess the quality of our service.
The Supervision Hub has had a good 12 months with targets being met across all service standards. Since the beginning of lockdown, overall, we have able to maintain a good level of service to firms and consumers despite some initial IT challenges as the team moved to permanent home working. To help with a reduction in telephony capacity, we signposted people to email rather than to call. This resulted in an initial increase in correspondence and reduced telephony volumes.
Letters, emails, web forms, webchat or faxes
We aim to provide prompt answers to questions from firms that we regulate and consumers: 2 working days for emails, web forms and webchats and 5 working days for letters. These standards apply to correspondence that:
- requires a response
- is addressed to our Supervision Hub
- is from a regulated firm or organisation (or from its professional adviser where the firm or entity name is given), or a consumer
These standards do not include correspondence subject to statutory service standards. For example, requests for information under the General Data Protection Regulation 2018 (GDPR), the Freedom of Information Act 2000 or the Environmental Information Regulations 2004.
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Graph 1 shows that we have provided a substantive response to firms’ email/web form/webchat correspondence within 2 working days 95.3% of the time. For letters, this has been within 5 working days 98.7% of the time. These are both above our voluntary target of 90% and have both increased compared to 2019.
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Graph 2 shows how we have performed against our standard to provide a substantive response to consumer correspondence from email/web form/webchat within 2 working days and letters within 5 working days. Both emails/web forms/webchats (93.4%) and letters (94.1%) are above our voluntary target of 90%, with results similar to 2019.
Telephone calls
We monitor the performance of our telephone service by the number of calls that are ended before they are answered. This happens if no advisers are available to answer a call promptly or the caller decides to end the call rather than wait. We minimise the number of unanswered calls by predicting when the we will be busiest and making staff available. Our standards measure how well we do this.
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We aim for no more than 5% of unanswered telephone calls for both firms and consumers. This is a voluntary target. We have achieved this target (as shown in graph 3) this year for both consumers and firms and have reduced the number of unanswered calls from firms from 2% to 1.3%.
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We are frequently contacted by telephone so answering calls quickly is important. We have set a voluntary target to answer 80% of calls from consumers and firms within 20 seconds. Graph 4 shows that we have achieved this target for both groups.
Calls directed via the switchboard and direct calls to others in the organisation are not subject to the above standards.
We offer our customers a post-call survey to measure our performance. This survey gives consumers and firms an opportunity to rate the expertise of our associates, the overall service received and leave additional comments. Firms can also rate the overall ease of use of dealing with the FCA and its systems and consumers can state how well they have understood their next steps based on our guidance. The standards below reflect our latest customer satisfaction score. We are reviewing our current service standards in line with our commitment to improve our service. We have set a voluntary target of 80% satisfaction for both telephony and correspondence. We have separated the standards for consumers and firms.
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Our correspondence satisfaction scores have improved following our work to ensure our written communications are free of jargon and easy to understand. Our webchat channel is liked and consistently scored highly by consumers. Through our analysis of low scoring surveys and review of consumer feedback, we identified areas for improvement which helped us achieve the target in 2020. These included increasing the availability of webchat and promoting its use, along with speaking with consumers on the phone where possible to discuss their question. Graph 5 shows the results from consumers.
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Graph 6 shows that we have achieved the target for firms (85% telephony and 81% correspondence). However, we still need to improve as this is a decline for both compared to 2019 (a decline of 3.9% for telephony and 3.2% for correspondence).
MPs’ letters
As part of our accountability to Parliament, we respond to requests for information from MPs and peers through letters, parliamentary questions and evidence to all Party Parliamentary groups.
We must give a full and prompt reply to any letter addressed to the FCA or any member of staff from Members of Parliament, Members of the House of Lords, Members of the Scottish Parliament, Welsh Assembly and Northern Ireland Assembly. These letters may be sent on behalf of a constituent or groups of constituents. As a public authority accountable to Parliament, it is important we respond professionally to these letters so we set ourselves target Service Level Agreements (SLA) for responding.
Our SLAs are paused if we must seek more information externally, for example from a constituency office, a firm or to another organisation. So, the period it takes us to respond can be longer than the reported SLA.
We have set a voluntary target of 80% to provide a substantive reply to letters from MPs within 15 working days and a voluntary target of 100% to respond within 20 days.
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A further, significant, increase in volumes of letters this year has largely contributed to us not achieving the standard (as shown in graph 7). We dealt with 482 letters from Parliamentarians on behalf of their constituents this year compared to 402 last year. We have taken steps to provide further resources to the team and continue to review the process to identify where we can make further improvements.
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We had several letters exceeding the 20 day SLA, as shown in graph 8. These letters were particularly complex and sensitive and required considerable additional attention and internal and external input from a number of areas. Where a letter takes longer or is likely to take longer than 20 days, we always inform the Parliamentarian’s office.
Freedom of Information Act (FOIA) requests
FOIA provides a general right of access to all information held by a public authority, subject to relevant exemptions and other conditions.
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The trend for increasing volumes of FOIA requests continued through 2019/20, with 803 requests received - up 13% on the previous year’s total. This resulted in some delays in responding to requests in the second half of the year, with performance dropping from 88.5% to 84.6% in 2019/20, as shown in graph 9. Our target is to respond to 90% of cases within the required timeframe of 20 working days. We have recently introduced new ways of working to bring our performance back to the required standard.
Data Protection requests
Under the Data Protection Act 2018, individuals have a right to request access to any of their personal data which we hold, known as a subject access request.
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Graph 10 shows the outcome for 2019/20 was 95.1%, which is above the 90% target.
Our statutory target is to respond to 100% of requests within the set timeframes of 20 working days for FOIA requests and 1 month for subject access requests under GDPR 2018. However, the Information Commissioner has accepted that public bodies (including the FCA) may not be able to meet the statutory requirements in every case. So we have set targets of 90% for both Freedom of Information Act requests and Data Protection requests. These are in line with the Information Commissioner’s guidelines and expectations.
Complaints
The Complaints Scheme was set up in April 2013 in line with the Financial Services Act 2012. It requires us to be able to investigate complaints made about alleged actions or inactions under the Act.
To ensure an accurate response, we may ask complainants for further written information. We may not be able to start investigating until we receive this information, but we aim to resolve all complaints as quickly as possible. We will write to complainants regularly to keep them informed of progress.
Service Standards:
Acknowledgement: acknowledge a complaint within 5 working days of receipt. Our voluntary target is that 95% of cases should receive a response within 5 working days of receipt.
Completion (complaints dealt with by the local business area): complete an investigation and send a response to the complainant within 10 working days. Our voluntary target is that 95% of cases should receive a response within 10 working days of receipt. The response to the complainant should inform them of their right to ask for a Stage 1 investigation.
Completion (complaints dealt with by the central complaints handling team): complete an investigation or provide a reasonable timescale to deal with the complaint within 20 working days (under paragraph 6.4 of the Complaints Scheme[4]). Our voluntary target is that we should complete 95% of stage 1 cases or provide a reasonable timescale for completion, within 20 working days of receipt.
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Graph 11 shows performance against the 3 service standards has reduced when compared to the previous year. This was due to a sharp increase in complaint volumes which has challenged the team’s capacity to meet demand. The overall volumes of complaints received increased from 557 in 2017/18, to 1,075 in 2018/19 and, finally, to 1,276 in 2019/20. Excluding complaints which cannot be investigated immediately because they include elements which have to be deferred (for example as a result of ongoing FCA action), the number of complaints received increased from 504 in 2018/2019 to 848 in 2019/2020. We have put several measures in place to address the increasing volumes. This includes:
- a short-term solution to recruit additional staff to provide support to the complaints team on a temporary basis
- a longer-term solution to increase the permanent base of the complaints team from 12.5 to 17.5 members of staff
Payment of suppliers
We aim to pay all valid, received invoices quickly, in line with industry best practice. We have set a voluntary target to pay 90% of valid invoices within 30 days of receipt. In response to Covid-19 we are aiming to accelerate payment of all approved supplier invoices. Our activities to support this process have included ensuring we capture all approved invoices in our weekly payment cycle, regardless of actual supplier terms.
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Graph 12 shows that we achieved 95.5% over the year, an improvement compared to the previous 2 years.
FCA systems
We have set voluntary standards to ensure that we are monitoring the availability of our external facing Information Services (IS) systems. The systems are:
FCA Register
A public record of financial services firms, individuals and other bodies under our regulatory jurisdiction, as defined in FSMA.
FCA website
Our website is our main digital channel for our consumer and firm audiences.
Fee calculator
This enables firms to estimate their FCA fees, Financial Services Compensation Scheme (FSCS) levy and Financial Ombudsman Service (FOS) general levy for different financial periods and scenarios (either the consulted rates or the final rates for that period).
GABRIEL (Gathering Better Regulatory Information Electronically) submission system
Our regulatory reporting system for collecting, validating and storing regulatory data.
The standards we have set for each system:
- ensure availability of external facing IS systems – 98.5% within the times below
- ensure availability of the FCA register system – Mon-Fri, 7am-8pm
- ensure availability of the FCA website – 24 hours x 365 days
- ensure availability of the fee calculator – Mon-Fri, 7am-8pm
- ensure availability of the GABRIEL system – Mon-Fri, 8am-10pm
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Graph 13 shows we achieved our target again this year, however we did see a slight drop in performance of the GABRIEL system. This occurred because in December 2019, we experienced problems due to a technical upgrade which caused a 2-day loss of GABRIEL service. Reviews have been carried out to understand the root cause, and actions implemented to avoid recurrence.
Due to the coronavirus restrictions, our IT department and 3rd party suppliers have activated business continuity & contingency measures. Service standards are being maintained throughout the period of remote working. At the commencement of the restrictions, effort was focused on improving remote working IT capabilities; to enable us to continue to protect consumers, ensure that financial markets work well and to ensure our systems were available for firms to access.
FSMA states that no individual or firm can legally carry out regulated activities unless authorised to do so or exempt. This is covered in the ‘general prohibition’ in section 19 of the Act. An individual or firm must apply to us for a ‘Part 4A permission’ to carry out those activities.
So, it is important that we authorise firms in a timely and efficient way.
We use authorisation to prevent harm. We do this by ensuring that all authorised firms meet common sets of minimum standards at the start. We refer to these standards as the Threshold Conditions (the conditions).
We will only authorise firms where they meet the conditions and continue to do so. If they do not, we will not allow them to enter the relevant financial market. We aim to prevent harm to consumers and stop threats to effective competition and to market integrity. For example, money laundering registration helps to prevent the harm to society caused by money laundering.
Standards
Authorisation application targets
A firm supplying the information we request on the application form will not necessarily be enough for the application to be ‘complete.’ An application is complete only when we have received all the required information and evidence.
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We have a statutory target of 100% to process a complete application for Part 4A permission within 6 months of a complete application (s55v1) or within 12 months of an incomplete application (s55v2). Graph 14 shows this year we achieved 99.7%. Three cases out of a total of 1,120 missed the standard. These applications were legally or technically complex and so required significant engagement with the firms.
Approved persons status
A firm applying to carry on regulated activities must also apply under Part V of FSMA for approval of 1 or more individuals to perform the controlled functions on its behalf once authorised (its ‘approved persons’). We must be satisfied that approved persons are fit and proper. This means that they have the honesty, integrity, reputation, competence and capability and financial ability to perform their role and comply with the code of conduct in the Handbook.
Processing an application for ‘approved person’ status
Our statutory target is to respond to 100% of applications within 3 months, unless it is attached to an application for part 4A permission. We also have a voluntary target of 85% to respond in 5 days for Customer Function (CF) and 10 days for Significant Influence Function (SIF). As of 9 December 2019, and the commencement of the Senior Managers and Certification Regime for solo-regulated firms, these functions now only apply to Appointed Representatives (ARs) and pure Benchmark Administrators.
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Graphs 15 and 16 show that both standards saw a reduction compared to last year. Graph 15 is down from 99.9% to 96.9% and graph 16 down from 83.9% to 56.6%. This was due to a significant number of solo-regulated firm applications that we received before commencement of the Senior Managers Regime for solo-regulated firms. This level was over and above the expected level of conversion activity. Additionally, a small number of complex cases required significant interaction with sponsoring firms which led to delays in decisions. We received a total of 22,859 applications. We processed 22,144 within the 3-month statutory timeframe (Graph 15) and 12,962 within the voluntary standard (shown in graph 16).
Money laundering registrations
Provisions for registration of ‘Annex 1 financial institutions’ under the Money Laundering Regulations 2017 state that, within 45 days of either:
- the date on which we receive a registration from an Annex 1 financial institution
- where the application is incomplete, the date on which we receive any further information
we must give the applicant notice:
- of our decision to register the applicant
- that we are minded not to register them, the reason for this and the right they have to make representations to us within a specified period (which may not be less than 28 days)
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We have a statutory target of 100% to process Money Laundering registrations within 45 calendar days of receiving an application or any further required information (Reg57(3) MLRs). Graph 17 shows that, while we achieved this standard in 2018 and 2019, it has dropped to 80.9% for 2020. This is due to a system issue identified in August 2019 which resulted in us failing to identify cases approaching the SLA (31 of the 162 cases were affected). We have changed how we monitor these cases and there have been no breaches since November 2019.
Authorised unit trusts (AUT), open-ended investment companies (OEIC) and authorised contractual schemes (ACS)
This covers all applications for us to authorise all types of UK-based collective investment schemes.
We have statutory target of 100% to process applications for the authorisation of new schemes under section 242 for AUTs, regulation 12 for OEICs and 261C for ACS within 6 months of receiving a complete application or within 12 months of receiving an incomplete application. If these involve an Undertakings for Collective Investments in Transferable Securities (UCITS) we are required by the directive to process these within 2 months.
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Graph 18 shows that we have achieved 100% for the last 3 years.
We are required to process complete applications to authorise Undertakings for Collective Investments in Transferable Securities (UCITS) within 2 months. We also aim to process complete applications to authorise Non-UCITS Retail Schemes within 2 months) and within 1 month for QIS (Qualified Investor Schemes). This is a voluntary standard.
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Graph 19 shows that we achieved 100% in 2018 and 2019, but this dropped to 92% in 2020. We missed the deadline in 4 out of the 50 cases, 3 of these we were waiting on the applicants to respond and for the fourth we were not satisfied that the scheme met the requirements of the rules within the voluntary timescale we were working to
Mutual Society registrations
A mutual society is an organisation owned by its members and run for their benefit or for the benefit of the community. They include building societies, friendly societies, credit unions and registered societies. Registered societies include co-operative and community benefit societies, formerly known as ‘industrial and provident societies’.
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We have a voluntary target to process a complete registration application from a mutual society within 15 working days of receipt. Graph 20 shows that we achieved 94.6% against our voluntary target of 90%, an increase compared to last year.
Payment Services Regulations and Electronic Money Regulations
UK firms providing payment services must apply to become either an ‘authorised’ payment institution or ‘registered’ as a small payment institution. This does not apply if it is already another type of payment service provider or is exempt. This is a requirement of the Payment Services Regulations 2017 (the PSRs).
UK firms that intend to issue electronic money (as defined in the Electronic Money Regulations (EMR) 2011) by way of business in the UK, must apply to become either:
- an ‘authorised’ electronic money institution
- ‘registered’ as a small electronic money institution
Further information on payment institutions and electronic money institutions[5]
We have multiple standards for Payment Services for PSRs and EMRs, and they each have their own statutory targets as follows:
PSR and EMR authorisation applications - To process a complete application for authorisation under PSRs and EMRs - target is 100% within 3 months of the received date of a complete application or within 12 months of the received date of an incomplete application.
PSR and EMR registration applications - To process a complete application for registration under PSRs and EMRs - target is 100% within 3 months of the received date of a complete application or within 12 months of the received date of an incomplete application.
PSR and EMR variations of registration - To process a complete application for a variation of registration under PSRs and EMRs - target is 100% within 3 months of the received date of a complete application or within 12 months of the received date of an incomplete application.
PSR and EMR variations of authorisation - To process a complete application for a variation of authorisation under PSRs and EMRs - target is 100% within 3 months of the received date of a complete application or within 12 months of the received date of an incomplete application.
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Graph 21 shows we did not achieve the target in EMR Authorisation applications and PSR Registration applications. This was partly due to complex business models in 4 out of the 225 applications we received under both standards. This led to an enhanced assessment in 3 EMR Authorisation applications and 1 PSR Registration application. To ensure the risk of harm was mitigated, we breached the SLA in each of these cases. We approved 1 case after the SLA and 3 applications were withdrawn. There were a further 8 cases that breached the SLA for the PSR Registration applications standard. The reasons included firms that became non-responders very late in the process and cases identified as having an incorrect ‘application complete’ date.
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Graph 22 shows we have achieved the target for all of the standards for the last 3 years. We did not receive any EMR variation of registration applications in 2019/20.
PSD2
PSD2 introduced a statutory requirement of 2 months for processing 100% of notifications for UK agents of payment services firms. The 2 graphs below show our reporting, both against that standard and against our voluntary service standard to process 85% of these notifications within 10 working days.
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We have achieved the target for this year which is an improvement on last year, as shown by graph 23.
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Graph 24 shows that we have achieved our voluntary target for the last year. We also we saw an improvement this year compared to 2019.
Adapting to changes
The decision to authorise a firm or individual is not a one-off. Firms and individuals may contact us to request changes to activities they are permitted to do. Our response to these requests should create public value by preventing harm. Standards in this section reflect how quickly we have considered and responded to notifications and requests to vary permissions.
Standards
We must be informed in writing of any proposed changes to a trust, its trustee, or its manager (under s. 251 of FSMA). We need to be satisfied that any changes will not adversely affect a trust’s compliance with our requirements.
Alterations to a collective investment scheme (CIS)
We need to be satisfied, and informed in writing, that any proposed changes to certain features of an authorised OEIC (under regulation 21 of the Open-Ended Investment Companies Regulations 2001) will not adversely affect the OEIC's compliance with our requirements.
We must be informed in writing of any proposed changes to certain features of an authorised contractual scheme (under regulation 261Q of FSMA). We need to be satisfied that following any changes, the scheme will continue to comply with our requirements.
Overseas collective investment schemes which are not UCITS may be recognised as individual schemes if the individual schemes satisfy the requirements set out in section 272 of FSMA. So, firms must inform us in writing of any proposed changes to an individually recognised overseas scheme (under s. 277 of FSMA).
Our standard practice is to acknowledge and give written approval wherever feasible. However, if we do not, then the proposal (under s. 251, 261Q and 277 of FSMA and regulation 21 of the OEIC regulations) gets automatic approval 1 month from the date we received notice.
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We have a statutory requirement to consider notice of proposed alterations to a collective investment scheme, and if appropriate, issue a warning notice. As graph 25 above shows we have achieved the 100% target for each of the last 3 years.
Variation of permission
Firms may change the nature of their business and apply to add or remove any regulated activities, investment or customer types. They may also apply to add a requirement or limitation to, or remove a requirement or limitation from, the scope of their Part 4A permission.
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We have a statutory requirement of 100% to process a complete application from an authorised firm for a variation of permission within 6 months of becoming complete (s55v(1)) or 12 months of receiving an incomplete application (s55v(2)). Graph 26 shows that we have made progress again this year, and we achieved the standard.
Cancellation of Part 4A permission
An authorised person with Part 4A permission can apply to us to cancel their permission. Changes to individual regulated activities involve a variation of permission, whereas the cancellation of all permission means that the firm would no longer be permitted to carry on any FSMA-regulated activities in the UK.
We may refuse an application for cancellation if it potentially causes harm to consumers or potential consumers. This may be the case, for example, if a firm has outstanding customer complaints.
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We have a statutory target of 100% to determine a complete application for cancellation of Part 4A permission within 6 months of becoming complete (s55v(1)) or 12 months of receipt of an incomplete application (s55v(2)). Graph 27 shows we have achieved this target for the last 3 years.
Appointed representatives
An appointed representative is a firm or individual that an authorised person (a principal) has contracted to carry on regulated activities on its behalf. The principal is responsible for the appointed representative complying with FSMA and our rules. As such, we can process notifications by a principal of its appointed representatives relatively quickly.
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Graph 28 shows how we have performed against our voluntary target of processing 95% of complete notifications for appointed representative status within 5 working days of the request. We processed the notifications within the 5-day voluntary target 84.2% of the time, which is below the target and down compared to last year’s 96.6%. The time taken to process appointed representative notifications was affected by our work dealing with the significant number of solo regulated firm related applications we received before the start of the SM&CR in December 2019 which was over and above the expected conversion activity.
Post-event notification to change our static data on a regulated firm
‘Static data’ is basic information on firms that is essential to effective regulation. Static data must be kept up to date because it is used by us, the Financial Ombudsman Service, the Financial Services Compensation Scheme and Financial Services Register users.
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When we process a complete ‘post event’ notification to change our firm details on a regulated firm we have set ourselves the voluntary target to process 95% of notifications within 5 working days of receipt. Graph 29 shows we have maintained our response rate of 99.9% this year, as we did for the previous 2 years.
Pre-event notification to change our static data on a regulated firm
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As with ‘post event’ notification we have also set ourselves the same target for ‘pre-event’ notifications. In each of the last 3 years we have achieved 100% for this standard, as shown by graph 30.
Passporting notifications
Under passporting rights, introduced by the European financial services directive, firms that are authorised to carry out regulated activities in another EEA member state are also entitled to carry on business in the UK. To exercise this right, the directives require the firm to notify us, through its own home state regulator, of its intention to do business in the UK. The directives covered within the passporting service standards are those for which the FCA has responsibility for processing notifications. Markets in Financial Instruments Directive; Insurance Distribution Directive; Undertakings for Collective Investment in Transferable Securities Directive; Alternative Investment Fund Managers Directive; Mortgage Credit Directive; Payment Services Directive and E-Money Directive.
Passporting in
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Graph 31 shows how we have performed against our statutory standards for ‘Passporting In’. The target for both standards is 100%, but each standard relates to slightly different requirements. The first standard in the graph relates to processing a notification from another competent authority in an EEA member state for one of its authorised firms to carry out business in the UK, under 'freedom of establishment', within the timeframe set by the relevant directive within the relevant deadlines for each directive (Sch 3, 13). The second standard in the graph relates to processing a notification from another competent authority in an EEA member state for one of its authorised firms to carry out business in the UK, under ‘freedom of services’, within the timeframe set by the relevant directive. We have to process this within the relevant deadlines for each directive. We achieved the target of 100% for the first standard. For the second standard, we did not achieve the target on 3 out of 800 cases and so missed the 100% target.
Passporting out
We have 4 separate statutory standards for ‘passporting out’ and these are all shown in the graph below. The first 2 standards relate to processing notifications from an FCA-authorised firm already carrying out business in another EEA member state under either ‘freedom of establishment’ or ‘freedom of services’. The second 2 relate to processing notifications of changes by an FCA-authorised firm already carrying out business in another EEA member state, again under either ‘freedom of establishment’ or ‘freedom of services’.
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Graph 32 shows how we have performed in the 4 standards. The first standard is to process a notification under ‘freedom of establishment,’ within the timeframe set by the relevant directive. Our target is to do this 100% of the time within the relevant deadlines for each directive and we achieved this target this year.
The second standard is to process a notification under ‘freedom of services,’ within the timeframe set by the relevant directive. Our target is to do this 100% of the time within the relevant deadlines for each directive. As with 2018 and 2019 we achieved this target this year.
The third standard is to process a notification of changes under the ‘freedom of establishment’, within the timeframe set by the relevant directive. Our target is to do this 100% of the time within the relevant deadlines for each directive. We did not achieve this target this year as 5 cases, out of the 2,839 received, missed the SLA.
The fourth standard is to process a notification of changes under ‘freedom of services’, within the time frame set by the relevant directive. Our target is to do this 100% of the time within the relevant deadlines for each directive. On this standard, we did not meet the SLA on 3 out of the 907 notifications received and missed the 100% target.
Notification of a proposed change in control
Controllers and firms must notify us before acquiring or increasing control (in line with part 12 of FSMA). A ‘controller’ refers broadly to a person who holds shares in or is entitled to exercise or control the exercise of, voting power or significant influence in a UK-authorised firm or a parent of a UK-authorised firm. The legislation allows us to object to the acquisition of or increase in control, or to approve with conditions. More information on control thresholds or bands[6] and change in control requirements[7].
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We have a statutory requirement to make a decision after receiving a ‘complete’ notification of a proposed change in control. Our target is to do this 100% of the time within 60 working days of acknowledgement of receipt (s189(1)). Graph 33 shows that we have achieved this target for the last 3 years.
Listing Transactions
The Listing Transactions (LT) Department encompasses our transaction review functions and the management of the Official List through our Listing Applications team.
Standards
An issuer must make an approved prospectus available to the public before certain securities are offered to the public or admitted to trading on a regulated market in the UK. Where the UK is the home state in relation to the issuer, the FCA must approve the prospectus. Where an application for approval is made to us, we must notify the applicant of our decision within the deadlines specified in FSMA. Unless we require further information, we must determine an application from a new issuer within 20 working days, and all other applications within 10 working days. We have put in place a system of voluntary targets for us to provide comments on submissions in advance of the statutory deadlines. For new issuers, we aim to provide comments on the initial submissions within 10 working days if the document is submitted in substantially complete form.
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We have set a voluntary target to comment on the initial proof of a document submitted for pre-vetting by a new applicant, or an unlisted issuer, undertaking a public offer and preparing a prospectus for the first time. Our aim is to comment on submission within 10 working days 95% of time. We have achieved this target this year as shown in graph 34.
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Graph 35 shows our voluntary standard to comment on the initial proof of a document submitted for pre-vetting by a listed issuer, or by an unlisted issuer, undertaking a public offer that has previously produced a prospectus. Our target is to comment on submissions within 5 working days 95% of time. This also covers documents submitted to us for approval that do not fall under the new issuer standard, (principally prospectuses and circulars issued by already listed companies). We aim to comment within 5 working days if the document is submitted in substantially complete form. We achieved our target, but with a small decrease compared to 2019.
All documents requiring FCA approval before publication must be submitted in substantially complete form. We often review several proofs of these documents before approval. As well as commenting on the initial proofs, we also aim to comment on subsequent proofs within 3 or 5 working days, depending on the document.
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As mentioned above we have set voluntary standards to comment on subsequent proofs of submissions. The standard for new issuers is within 5 working days from receipt for comments on subsequent proofs of document submitted for pre-vetting by a new applicant, or by an unlisted issuer, undertaking a public offer and preparing a prospectus for the first time.
The standard for existing issuers is within 3 working days from the day of receipt for comments on subsequent proofs of document submitted for pre-vetting by a listed issuer, or by an unlisted issuer, undertaking a public offer and that has previously produced a prospectus.
Graph 36 shows we have achieved both targets this year.
We sometimes give guidance on applying our rules. We respond to reasonable requests for guidance made by, or on behalf of, the named party required to comply with the applicable rule. We aim to provide either a substantive reply or a request for further substantive information within 5 working days.
- If the person submitting the document specifically agrees that a longer period is appropriate, compliance with the initial proofs standards will not be affected.
- For the standards relating to subsequent proofs, we may treat further drafts substantially redrafted or resubmitted only after long delays as initial submissions. In such cases, we will let the issuer or their advisers know as soon as practicable after the draft is submitted.
- The periods referred to in these items are business days and do not include the day we receive them.
- For initial submissions, the day of receipt ends at 4pm; we will treat documents received after this time as received the following day.
- Delays resulting from failure to comply with FCA processes will not affect compliance with the initial proofs standards, such as one (or more) of the following:
- outstanding document vetting fee
- significant eligibility concerns have not been addressed
- a draft document submitted is substantially incomplete
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Our final standard is also voluntary and is to provide a substantive reply to other queries received in writing, or provide a request for further substantive information. Our target is to provide this reply within 5 working days on 95% of queries. We achieved this target again this year but with a slight increase compared to 2019, as shown in graph 37 above.