Category: Compliance & AML · Reviewed by Tim Roche, Director · PI & Commercial · Last reviewed June 2026
The minimum standards an authorised firm must meet at all times to retain its FCA (and, where applicable, PRA) authorisation — covering legal status, location, effective supervision, resources, suitability and business model.
The Threshold Conditions (TCs) are the statutory minima for FCA authorisation. They apply not only at the point of grant of permission but throughout the life of the authorisation. Material non-compliance with any one of them can lead to variation, restriction or cancellation of permission.
FSMA Schedule 6 sets the Threshold Conditions. The FCA’s general guidance sits in COND (Threshold Conditions) in the Handbook. Schedule 6 was substantially amended by the Financial Services Act 2012 to split the conditions between FCA-only firms and dual-regulated firms.
For an FCA-only firm, the Threshold Conditions are: (TC2A) legal status (must be the right legal form for the activities); (TC2B) location of offices (head office and registered office must be in the UK for UK-incorporated firms); (TC2C) effective supervision (the firm must be capable of being effectively supervised); (TC2D) appropriate non-financial resources (sufficient and adequate); (TC2E) suitability (the firm and its directors must be fit and proper, including conducting business with integrity); (TC2F) business model (the strategy must be suitable for a person carrying on the regulated activities).
For dual-regulated firms the FCA-only conditions are joined by PRA conditions (TC3A–TC3E) addressing financial resources, prudent management, business to be conducted in a sound and prudent manner, and effective resolvability. Group structures bring additional considerations on transparency and supervisory cooperation.
A failure to renew PII before expiry can engage TC2D (appropriate non-financial resources) and TC2E (suitability). Inability to demonstrate adequate governance can engage TC2C (effective supervision). The FCA’s standard remediation tools — VOPs, requirements and (in extremis) cancellations — derive from a TC analysis.
FCA Handbook, Threshold Conditions (COND). Financial Services and Markets Act 2000, Schedule 6. Financial Services Act 2012.
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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