Category: Compliance & AML · Reviewed by Tim Roche, Director · PI & Commercial · Last reviewed June 2026
Conditions attached to a Part 4A Permission that narrow what the firm may do (limitations) or that impose positive obligations (requirements) — used by the FCA to scope authorisations and as a supervisory tool short of variation or cancellation.
A “limitation” restricts the scope of a permitted activity — for example, a customer-type limitation (“retail clients only”), a volume limitation, or an exclusion of certain product types. A “requirement” imposes a positive obligation on the firm — for example, a requirement to obtain attestations, to maintain heightened capital, to refrain from new customer acquisition, or to engage a skilled person.
FSMA section 55E (FCA grant of permission with limitations), section 55L (FCA Own Initiative Requirement powers — OIREQ), and section 55N (general provisions). The FCA Handbook provisions in SUP 7 and EG 8 govern use of these powers in supervision and enforcement.
Limitations are typically agreed at authorisation or VOP and remain in place until varied. Requirements are imposed by the FCA in supervision — usually after concern about Threshold Conditions — and may be voluntary (agreed to by the firm — VREQ) or imposed (OIREQ). Voluntary requirements (VREQs) often follow a supervisory dialogue; imposed requirements (OIREQs) reflect a more serious supervisory position.
A common limitation for newly authorised firms is a customer-volume cap during a probationary period. A common requirement for firms under remediation is an attestation from a Senior Manager confirming specific issues have been addressed. Section 166 skilled persons reviews are themselves a form of requirement.
A firm under FCA scrutiny over Consumer Duty implementation may be subject to a requirement to obtain an attestation from its SMF16 holder that Consumer Duty governance, fair value assessments and outcomes monitoring meet PRIN 2A standards, supported by an independent review. Until the requirement is lifted, the firm must comply.
Financial Services and Markets Act 2000, sections 55E, 55L, 55N. FCA Handbook, SUP 7 and EG 8.
By Matt Bartlett, Director, on 2026-06-11.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-11. Apex Insurance Brokers Limited, FCA FRN 724952, Companies House 07014570. Not regulated advice — consult your broker on your specific position.
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