FCG’s five best tips for a successful license application
Are you considering applying for a license at the Financial Supervisory Authority for a new business? Our experts have shared their best tips for you to be successful with your license application.
Make sure you have thought through your business idea carefully before you start
Can you clearly describe what you want to do? What products and services do you want to offer? Which customers should you target? What technical aids do you need? Remember that a change in the structure that seems insignificant to you can have great legal significance for the license application. With a clear and detailed description of the planned activities, you reduce the risk of delays and unforeseen costs.
Prioritize setting up the new organization
How many and which senior executives (in addition to the CEO, e.g., CFO, CTO, COO) need to be part of the new organization? Who should be responsible for what? These are parts that often take a lot of time and that FCG experiences require many tricky decisions from our customers. Many license types require independent functions and specific positions in the company. At the same time, it is common for the customer to have a limited budget. The challenge is then to find the right balance between the customer’s financial conditions and the requirements to staff mandatory roles and maintain independent functions. FCG offers support in interpreting laws and practices to provide answers to e.g., how many people make up an appropriate organization. These can be questions about whether the CEO can have several roles, whether additional competence is needed or whether a function can be outsourced. However, it is important that you who run the process have your own idea and do not delay in making decisions about your organization far into the process, which can risk delaying the schedule.
The board must be prioritized early
In the same way as with the organization, it is important to decide early on which people should sit on the company’s board and to anchor your idea with these people. Competence and experience of activities subject to a license in general, and specifically with regard to the intended activity, is important and a requirement for many licenses. It is also important to consider the proportion of board members who should be independent in relation to operations and ownership. Issues of diversity and gender equality are also on the agenda. The Financial Supervisory Authority will examine the board members carefully, so be careful when choosing which ones you want to include in it. It is important that you do not delay in deciding on the composition of the board well into the process as there is a risk of delaying the schedule.
Ensure that the business has sufficient financing
Can your business concept run a company subject to a license for the next three years? Can you convince The Financial Supervisory Authority that the business can pass a stress test with negative scenarios? In some cases, the importance of having stable financing over time is underestimated and the Financial Supervisory Authority attaches great importance to stable finances. To avoid an unpleasant surprise from the Financial Supervisory Authority you should focus on the economy and make realistic forecasts of income and expenses before you start with your license application.
Set aside your own time for the project
It is not uncommon for a license application project to take longer than you intended. This is often due to the fact that critical decisions are delayed, and the time needed to review material from FCG or write your own texts. By taking into account that you, and other relevant resources at your company, need to take an active part in the work, you will create good conditions for completing the application according to the desired schedule.