WHAT APPLICANTS NEED TO DO NEXT.
The FCA’s new cryptoasset authorisation gateway is now open. For firms intending to operate in the UK under the new regime, the focus now shifts from preparation to execution.
From today, firms can submit applications for authorisation under the UK’s new cryptoasset regime. The application window will remain open until 28 February 2027, with the new regime expected to come into force on 25 October 2027.
For firms that have been preparing over recent months, this is an important milestone. But opening the gateway is not the finish line. The quality, completeness and credibility of the application will be critical.
For firms that have not yet started, a robust application requires time to develop, address gaps, gather evidence and bring the different elements of the application together. But there is still time to build a successful application if you act now.
The FCA has spent several years developing the new framework. With the bulk of the final rules now published, firms have greater certainty over the regulatory expectations they will need to meet. The focus now is to turn those requirements into a credible application and a business that can operate effectively under the new regime.
START WITH THE APPLICATION STRATEGY.
Before getting into the detail of individual sections, firms should establish a clear application strategy.
This should answer some fundamental questions:
- What entity is applying?
- What permissions are required?
- What activities will the firm undertake?
- What will the operating model look like once authorised?
- Which elements of the model are already operational, and which still need to be built?
These decisions should drive the application particularly for firms with complex group structures or international operations. The UK regulatory model needs to be considered alongside group arrangements for technology, liquidity, outsourcing, customer support and governance.
BUILD THE APPLICATION AROUND EVIDENCE.
A common risk with regulatory applications is treating the exercise as a documentation project.
A strong application is more than a collection of policies. The FCA needs to understand how the business operates, how risks are identified and managed, and how senior management exercises effective oversight.
Firms should therefore identify the evidence supporting their application early. This could include evidence of effective financial crime controls, governance arrangements, safeguarding or custody processes, operational resilience, third-party oversight and financial resources.
Where a capability is still being developed, the objective should be to demonstrate a credible path to readiness ahead of the regime coming into force.
FIVE ACTIONS FOR FIRMS TO TAKE TODAY.
With the gateway open, firms should consider five immediate steps:
- Confirm the application scope
Finalise the proposed permissions, regulated activities, applicant entity and target operating model. - Assess readiness
Identify gaps across governance, financial crime, prudential, safeguarding or custody, operational resilience, technology, Consumer Duty and reporting. - Build the evidence base
Identify what evidence supports the application and where additional implementation or remediation is required. - Establish application governance
Put clear ownership, milestones and senior management oversight around the application programme. - Set a realistic submission timetable
Allow sufficient time to complete the application, address outstanding gaps and undertake a robust management review before submission.
AUTHORISATION IS THE BEGINNING
The opening of the gateway marks a significant milestone for the UK cryptoasset sector. For firms, however, submitting an application is only one part of the journey.
The objective should be to emerge from the process with a regulatory model that supports the business commercially and a control environment capable of supporting sustainable growth.
The firms that approach the process as a business transformation and mobilisation exercise, rather than simply a regulatory application, will be better positioned for the transition.
Preparing your cryptoasset authorisation application? Cosegic can support firms across the authorisation journey, from regulatory readiness and permissions assessment through to application planning, regulatory business plans and submission support. Contact our Digital Finance team to discuss your requirements.
