Hogan Lovells is giving UK fintech startups a leg-up on the regulatory ladder with the launch of an online tool to help firms navigate the Financial Conduct Authority's authorisation process.
The law firm's 'Regulatory Accelerator' includes resources and tools to help startups determine whether they are conducting regulated activities or issuing financial promotions, and whether they, therefore, need to be an authorised firm or an appointed representative. It also provides information on the FCA application process, what companies will need to demonstrate to the FCA in order to be eligible for authorisation and the key rules that will apply to the business once it becomes authorised.
The UK watchdog has been working hard to adapt its arcane rulebook to meet the needs of innovative new fintech firms, but the process still remains a challenge for many. A survey of its membership by Innovate Finance earlier this year estimated the cost of getting authorised at approximately £200,000, taking into account both internal resources and external advisers. Members described their difficulty in understanding the complex regulatory regime and scope, the amount of time, capital and resource they burned, and their uncertainty about the process and whether they needed to be authorised at all.
Commenting on the Regulatory Accelerator, Rachel Kent, global head of Hogan Lovells Financial Institutions Sector, says the new online resource should help make it easier, quicker and less expensive for startups to get to market
"Cost and management time devoted to becoming and being authorised are a major investment for any business," says Kent. "We know that the FCA has gone a long way to help with their Regulatory Accelerator programme but we also know that this is not available for everyone, so we have created our own...tool to address the challenges we see fintech clients facing on a daily basis."