Six months. That is the statutory deadline the Financial Conduct Authority works to once a complete application for authorisation lands on its desk, and twelve months for an incomplete one. Most broker applications are, by the FCA's definition, incomplete at some point in the process. Understanding why is the fastest way to understand what this licence really is: an assessment of a whole business, its people and its money, rather than a form to be filed.
What FCA authorisation actually is
There is no single document called a forex licence. A UK broker holds authorisation under the Financial Services and Markets Act with a set of permissions attached: dealing in investments as principal or as agent, arranging deals, holding client money. The permissions define exactly what the firm may do, and the FCA polices that boundary. A CFD broker running its own book needs the principal dealing permission. A pure introducer needs far less, and pays far less for the privilege.
What a UK CFD permission lets you sell
Retail CFDs in the UK sit under conduct rules the FCA made permanent in 2019: leverage capped at 30:1 on major currency pairs and lower on everything else, negative balance protection for retail accounts, standardised risk warnings that publish the share of losing accounts, and a ban on deposit bonuses and similar incentives. The regime grew directly out of the ESMA intervention and kept its shape after Brexit. Clients who meet the tests can be categorised as professionals and opt out of the caps, and a meaningful share of UK industry economics now rests on that split being handled honestly.
Capital and the ICARA
Under the Investment Firms Prudential Regime, base own funds start at £75,000 for the lightest permission sets, £150,000 for firms holding client money or trading matched principal, and £750,000 for firms dealing on own account. Treat those as floors, not targets. The ICARA process obliges each firm to model its own wind-down costs and harm scenarios, and supervisors expect capital held against the result, which for most dealing brokers lands well above base. Add liquid asset requirements and the honest answer for a market-making broker is seven figures of committed capital. Our guide to broker capital requirements compares this across regulators.
The full cost, beyond the fee
The application fee itself runs from the low thousands into tens of thousands of pounds depending on the complexity category of the case. The real budget lives elsewhere. Authorisation counsel and compliance consultants draft the regulatory business plan. Senior managers must be approved under the Senior Managers and Certification Regime and paid market salaries whether or not revenue exists yet. Then come office space, professional indemnity cover, IT and reporting systems, and once live, ongoing FCA fees plus FSCS and ombudsman levies. A realistic all-in first-year figure for a dealing broker is well into six figures before a single client trades. Anyone weighing this against Cyprus should read FCA vs CySEC before concluding the premium is or is not worth paying.
The timeline nobody publishes
Preparation before filing typically takes three to six months: business plan, three-year financial projections, a compliance monitoring programme, senior managers identified and willing to be named. Then the statutory clock starts, and in practice it stretches through rounds of written questions that can reset completeness. From first drafting to permission, twelve to eighteen months is the sensible planning assumption. The FCA also interviews key people, and weak answers about how the dealing desk manages market risk have sunk otherwise tidy files.
The FCA authorises people as much as paperwork. Senior managers carry personal accountability under SMCR, and the regulator expects them to be resident, competent and genuinely in control. A borrowed director who cannot explain the firm's own risk policy is the fastest route to a refusal.
Who should want this licence
Authorisation is where supervision starts, not where scrutiny ends. Client money is reconciled under CASS rules, transactions are reported under UK MiFIR, complaints route to the Financial Ombudsman Service, and returns on capital and liquidity flow to a data-led supervisor that compares every firm against its peers. The compliance function works every week, forever.
So who should sign up for that? Firms whose clients are in the UK, where the permission is simply the entry ticket, and firms selling credibility to institutional counterparties. For a startup broker whose clients sit in Asia, Africa or Latin America, the same money buys years of runway under a lighter regime, which is why many begin offshore and add tier-one licences later; the licence cost comparison sets out that arithmetic. Whichever route a firm takes, a regulator that asks for daily client money reconciliations expects software that can produce them on demand, which is exactly the job a purpose-built broker back office exists to do.
"Firms budget for the application and forget the two years of salaries around it. The FCA authorises a business, not a binder of policies. If the business only exists on paper, they can tell in one interview."
— Roman Onta, Executive Director, SINGUARD
Key Takeaways
- FCA authorisation is a set of permissions under FSMA; what a firm may do is defined permission by permission, not by one licence document.
- Base own funds run from £75,000 to £750,000 under IFPR, and the ICARA process usually pushes real capital well above the floor.
- Plan twelve to eighteen months from first drafting to permission, with approved senior managers hired and paid throughout.
- The FCA fits firms whose clients are in the UK; for other client bases the same budget can fund years of operation under a lighter regime.
Frequently Asked Questions
How long does FCA authorisation take?
The statutory deadline is six months from a complete application and twelve months from an incomplete one. Counting preparation, drafting and rounds of regulator questions, twelve to eighteen months from first work to permission is a realistic planning assumption for a broker.
How much does an FCA broker licence cost?
The application fee runs from the low thousands into tens of thousands of pounds depending on case complexity. The larger budget is everything around it: authorised senior managers on salary, compliance drafting, office and systems, plus regulatory capital held from day one. A dealing broker should plan for a mid six figure first year before revenue.
Can an FCA broker serve clients outside the UK?
Yes, subject to the rules of each client's own country. Since Brexit a UK permission no longer passports into the EU, so serving EU retail clients generally requires a separate EU licence or reliance on narrow reverse solicitation rules.