Threshold conditions—firms authorised by the PRA or dual regulated by the PRA and the FCA
Produced in partnership with John Ahern of Jones Day
Threshold conditions—firms authorised by the PRA or dual regulated by the PRA and the FCA

The following Financial Services guidance note Produced in partnership with John Ahern of Jones Day provides comprehensive and up to date legal information covering:

  • Threshold conditions—firms authorised by the PRA or dual regulated by the PRA and the FCA
  • The threshold conditions
  • When do the threshold conditions apply?
  • Failure to satisfy the threshold conditions
  • Condition 1—legal status
  • Condition 2—location of offices
  • Condition 3—effective supervision
  • Condition 4—appropriate non-financial resources
  • Condition 5—suitability
  • Condition 6—business model
  • more

All Prudential Regulation Authority (PRA) authorised firms are required to maintain a set of minimum standards in order to become and remain authorised. These standards are referred to as the 'threshold conditions'. The threshold conditions are set out at Schedule 6 to the Financial Services and Markets Act 2000 (FSMA 2000). This was amended by the Financial Services and Markets Act 2000 (Threshold Conditions) Order 2013, SI 2013/555.

The Financial Conduct Authority (FCA) and the PRA have separate responsibility for threshold conditions in relation to firms authorised by the PRA:

  1. The FCA is responsible for threshold conditions relating to effective supervision, appropriate non-financial resources, suitability, business model and (where relevant) appointment of claims representative.

  2. In relation to insurers, the PRA is responsible for threshold conditions relating to legal status, location of offices, business to be conducted in a prudent manner, suitability and effective supervision.

  3. In relation to other PRA authorised persons (other than insurers, Lloyd's managing agents or Lloyd's insurance business), the PRA is responsible for threshold conditions regarding legal status, location of offices, business to be conducted in a prudent manner, suitability and effective supervision.

The PRA and the FCA will expect firms and those seeking authorisation to satisfy these conditions both on being granted authorisation for the first time and on a continuing basis afterwards.

The changes introduced by the Financial Services