The parliamentary bill that could speed up the FCA

It may not be as glamorous as performative rule-cutting, but the Financial Services and Markets Bill has the potential to speed up the FCA, write Omar Salem and James Borley The British famously love queuing. And remember the outcry when some were accused of jumping the queue to see Queen Elizabeth II lying in state? Queuing isn’t just a tradition but says something about our sense of fairness. But we have all been in a situation where the queue isn’t moving, no one knows what’s happening and we start thinking about giving up.

Too often that is the case for applicants for FCA and PRA licences, some of whom may go to other countries. Ask anyone who has tried to launch a payments firm or buy a broker what slows them down, and the answer is rarely the rules. It is the wait – unsure when the regulator will decide, or even when it will start deciding. Granted, things have improved from the backlogs of a few years ago, and the FCA has become more proactive in explaining the process and its expectations to the market, but the process still takes too long and lacks accountability.

The regulators’ favourite loophole A key example of the lack of regulatory accountability in the system is the, at best, liberal interpretation of the law that the regulators have been using to massage their performance statistics. The clock for regulators to decide an application only starts ticking when it is ‘complete’. ‘Incomplete’ has become a convenient way for the FCA and PRA to buy more time, regardless of whether it is warranted or not.

To complicate things further, the FCA also says it can choose to treat an application as ‘not been received’ because it does not include the ‘minimum information’ required. So, what is the difference between an application rejected for not having the ‘minimum information’ and one that is incomplete? Yes, you’re not alone in being confused. The bill we need The Financial Services and Markets Bill , which is currently making its way through Parliament, would make some limited decreases to deadlines that the regulators need to meet.

This is part of the government’s ‘growth agenda’ and efforts to cut red tape. The bill would cut the maximum period for determining an authorisation from a year to… 10 months. The incompleteness loophole would be retained. We can do much better. For starters, the bill should go further on deadlines and bring approvals for M&A within them. There is no reason why a maximum six-month period to determine an authorisation application should not be possible.

The bill should set clearer standards that can’t be gamed on when an application is complete, while letting regulators more easily turn away poor-quality applications quickly. The FCA should also be encouraged to learn from the firms it authorises. A single application can involve the applicant, its lawyers, several case officers and specialist teams at the FCA. Fintechs coordinate exactly this kind of multi-party work every day, using project management tools such as Jira to assign tasks, track dependencies and show everyone where things stand.

Why can’t the FCA do this? Imagine an applicant able to see that its file is with the financial crime team, that two questions are outstanding and that a decision is on track. Fewer chasing emails, fewer surprises and a clear record of where delays arise that can be used to find ways to improve the process. Agentic AI opens even more possibilities. The bill should require the regulators to report to Parliament on how they are making authorisations more efficient, including by using technology.

Fairness not favours While there can be a trade-off between risk and growth, there are also many steps the FCA could take to support growth without increasing risk. Faster and more consistent authorisations are a prime example of this. This isn’t about lowering the standard of applications or giving favours to the City, but building a system that works. It may not be as glamorous as performative rule-cutting, but it would make a difference.

What is more, like queuing, an accountable and effective authorisations process is a matter of fairness. Omar Salem is a partner consultant at Pierson Ferdinand UK LLP. James Borley is director for payment services and digital assets at Complyport