UK FCA EMI License: What the Application Really Takes

The FCA's EMI authorization process is long, expensive, and deliberately opaque in places. Understanding what really happens between application and approval can save you months of frustration and hundreds of thousands in advisory fees.

Two types of EMI: choose carefully

The FCA offers two categories of electronic money institution authorization, and the difference is more than scale.

Small EMI (SEMI) registration applies to firms issuing no more than GBP 5 million in outstanding e-money at any point. The application process is simpler, capital requirements are lower (no minimum prudential capital), and processing times are shorter, typically 3 to 6 months. But there's a catch: SEMI registration doesn't passport to the EU. Post-Brexit, this matters less for EU access (which isn't available regardless), but it signals a regulatory status that some banking partners treat as second-tier.

Full EMI authorization requires minimum initial capital of EUR 350,000 (held in GBP equivalent), plus ongoing capital calculated as 2% of average outstanding e-money. The application process is substantially more intensive, involving multiple rounds of review and typically at least one interview with FCA supervisors. Processing time: 12 to 18 months from submission of a complete application, though the FCA's statutory deadline is 12 months from the date of completeness.

The word "complete" is doing heavy lifting there. The FCA frequently issues requests for additional information within weeks of submission, effectively restarting the clock. Applications that arrive without adequate supporting documentation can spend 3 to 6 months in the pre-assessment phase before the FCA even considers them formally complete.

What the application package must contain

The FCA's published application forms (available through Connect) request standard information about the firm, its controllers, and its proposed activities. The real work is in the supporting documentation, which the FCA expects to be detailed, specific, and internally consistent.

Required supporting materials include:

A business plan covering at least three years, with detailed financial projections, client acquisition strategy, and market analysis specific to the UK
Policies and procedures for safeguarding client funds (this is where most applications first encounter trouble)
AML/KYC policies, procedures, and controls, including the identity of the nominated MLRO (Money Laundering Reporting Officer)
IT security policies, business continuity plans, and outsourcing arrangements
Governance structure showing clear lines of responsibility, including board composition and senior management functions under the Senior Managers and Certification Regime (SM&CR)
Personal questionnaires and criminal record checks for all controllers, directors, and persons holding Senior Management Functions

Each of these items generates its own set of follow-up questions. The business plan, for instance, will be scrutinized for consistency with the financial projections. If your plan says you'll acquire 50,000 customers in year one but your marketing budget can't support it, the FCA will ask why.

The fit-and-proper assessment: where applications die

Every individual holding a Senior Management Function must pass the FCA's fit-and-proper test. This covers three areas: honesty, integrity, and reputation; competence and capability; and financial soundness.

What trips people up:

County Court Judgments (CCJs) or IVAs. Any personal insolvency event in the past 6 years will require explanation. It doesn't automatically disqualify, but applicants who fail to disclose them proactively face much harder questions.
Regulatory history in other jurisdictions. The FCA exchanges information with regulators worldwide. If you held a license in another country that was revoked, restricted, or subject to enforcement action, the FCA will know. Failing to disclose this is treated as a lack of integrity, which is almost always fatal to the application.
Gaps in employment history. The FCA's personal questionnaire asks for a complete 10-year employment history. Unexplained gaps generate follow-up requests. Extended periods of self-employment without verifiable references create problems.
Competence mismatches. The CEO of an EMI needs demonstrable experience in payments or financial services. The compliance officer needs relevant qualifications and UK regulatory experience. The FCA has rejected applications where the proposed senior management team lacked payments-specific expertise, even when they had extensive experience in other financial sectors.

The interview: what they actually ask

For full EMI applications, the FCA typically conducts at least one interview with the proposed CEO, compliance officer, and sometimes the MLRO. These interviews happen via video call or at the FCA's offices in London and Edinburgh.

The FCA's interview approach is less confrontational than the term "interview" suggests. It's more of a structured discussion designed to assess whether senior managers genuinely understand their proposed business, the regulatory framework, and the risks specific to their activities.

Questions that come up repeatedly:

How will you safeguard client funds? (The FCA wants specifics: which safeguarding method, which credit institution, what happens if your safeguarding bank fails)
Describe your transaction monitoring approach for AML purposes. (Generic answers about "risk-based approach" won't suffice; they want to know your actual rules, thresholds, and escalation processes)
What happens when a customer complaint reaches you? (They're testing whether the complaints process is a real workflow or a document that sits on a shelf)
How will you maintain adequate capital if your business grows faster than projected? (This tests whether the financial projections in the business plan reflect genuine planning or optimistic guesswork)

Applicants who answer these questions by deferring to consultants or outsourced compliance providers raise red flags. The FCA wants to see that the people who will run the business understand the business. Saying "our compliance consultant handles that" during an interview is a poor strategy.

Post-authorization: the obligations nobody budgets for

Receiving FCA authorization is the beginning, not the end. Newly authorized EMIs face an initial supervisory period during which the FCA monitors the firm closely. Obligations that generate ongoing costs:

Safeguarding audits: An independent audit of client fund safeguarding arrangements must be conducted annually and submitted to the FCA. Cost: GBP 15,000 to GBP 40,000 depending on the auditor and complexity.
REP-CREDS reporting: Quarterly reporting on safeguarded funds, volumes, and capital adequacy.
Financial crime returns: Annual reporting on suspicious activity reports filed, staff training completed, and risk assessment updates.
SM&CR ongoing obligations: Maintaining statements of responsibilities, conducting annual fit-and-proper assessments of certified staff, and reporting breaches.
FCA periodic fees: Based on the volume of safeguarded funds. For a mid-sized EMI holding GBP 50 million in client funds, annual FCA fees run GBP 30,000 to GBP 60,000.

The 90-day myth

Consulting firms and corporate service providers sometimes advertise "FCA EMI license in 90 days." This figure is misleading to the point of being dishonest. What they may be referring to is the SEMI registration process (which can indeed complete in 3 months for simple applications), but they often market it alongside full EMI application services.

The fastest full EMI authorizations in recent years have taken approximately 9 months, and those involved firms with established regulatory track records, experienced management teams, and applications prepared by specialist FCA regulatory lawyers. For first-time applicants, 14 to 18 months is more realistic.

The total cost of obtaining a full FCA EMI authorization, including regulatory capital, legal fees, compliance setup, and initial staffing, ranges from GBP 600,000 to GBP 1.2 million. That's before the firm processes a single payment.

Is it worth it?

The FCA's authorization process is demanding for a reason: the UK payments market is large, sophisticated, and attractive to both legitimate operators and those who would misuse payment infrastructure for financial crime. The FCA's scrutiny, while frustrating for applicants, produces licensed firms that banks and partners are willing to work with.

Alternatives exist. Lithuania's Bank of Lithuania issues EMI licenses with EU passporting rights in 3 to 6 months and at significantly lower cost. The Netherlands' DNB and Luxembourg's CSSF are also options for EU-focused businesses. But none of these give you direct UK market access post-Brexit, and the UK remains the largest payments market in Europe.

If the UK is your primary market, the FCA process is the price of admission. Budget appropriately, hire people who've done it before, and don't believe anyone who tells you it'll be quick.