Why your FCA MLR registration will not carry over to FSMA
The assumption that will cost firms a licence
A great many UK cryptoasset businesses spent years and a substantial amount of money getting registered with the Financial Conduct Authority under the Money Laundering Regulations. It is a reasonable instinct to assume that record counts for something when the new FSMA cryptoasset regime arrives. It counts for experience. It does not count as an application.
The FCA has put this beyond argument on its own guidance pages. On the operation of the authorisation gateway it states that for MLR-registered firms “there will be no automatic conversion and that they will need to secure authorisation by us under FSMA”. On the interaction between the two regimes it is blunter still: “Being registered under the MLRs does not guarantee authorisation under FSMA,” and “an application form for registration under the MLRs can’t be treated as an application form for authorisation under FSMA.”
Two separate regimes, two separate assessments, two separate applications. If you are registered today and do nothing, you will not be authorised when the regime commences.
The dates that structure the decision
Three dates do most of the work:
- 30 September 2026 — the FCA expects the authorisation application period to open.
- 28 February 2027 — the FCA expects that application period to close.
- 25 October 2027 — the new regime commences.
The gap between the window closing and the regime starting is not slack in your timetable. It is the FCA’s assessment period, and it is what the regulator has allowed itself to determine the applications it receives.
Applying in the window buys you continuity
Firms that get an application in during the window are protected if the FCA has not finished deciding by commencement. A saving provision allows “the firm to continue to provide cryptoasset services until its application has been finally determined”. In practice that means business as usual while you wait.
Firms that miss the window are in a materially worse position. Those applying after 28 February 2027 but before 25 October 2027, and not authorised by commencement, “will at the point the new regime goes live, enter the transitional provision (by operation of law)”. That provision is narrow. A firm inside it may conduct the new regulated cryptoasset activities only “to the extent necessary for the performance of a pre-existing contract”, and cannot take on new customers.
For most business models that is not a transitional arrangement so much as a wind-down. Revenue growth stops on 25 October 2027 and does not restart until authorisation is granted.
There is no reward for being late
Firms sometimes plan on the assumption that a regulator under deadline pressure will accelerate files that arrive late. The FCA has closed that off directly: “we will not expedite our assessment of a firm’s application to compensate for its late submission.”
The corollary is that a late application does not simply arrive late — it is also assessed at ordinary speed, behind everything filed on time.
What this means if you are not yet MLR-registered
The picture is more nuanced for firms that are in scope of the MLRs today but not yet registered. The MLR gateway does not close when the FSMA gateway opens, and the FCA has indicated that after 30 September 2026 it “will encourage firms to focus on securing authorisation under FSMA, rather than applying for registration”. It has also flagged 31 July 2027 as the point beyond which an MLR application is unlikely to be determined before the new regime begins.
Firms that will not benefit from an exemption still need to register under the MLRs once the FSMA regime has begun, and the MLR gateway continues to operate as normal for them. The judgement call — whether to pursue MLR registration in parallel or go straight for FSMA authorisation — depends on whether you need to be lawfully operating in the interim and whether an exemption applies. It is worth taking advice on that specific question rather than reasoning from a general rule.
What an existing registration is actually worth
The registration itself does not transfer, but the work behind it is not wasted. Financial crime systems and controls, fitness and propriety evidence for senior individuals, governance documentation and customer due diligence processes all feed directly into a FSMA application.
What an MLR registration does not evidence is the substance FSMA authorisation turns on — the threshold conditions, prudential resources, consumer duty outcomes, operational resilience, and a business model the FCA is prepared to see operating at scale. Those are new assessments, and for many registered firms they are the harder ones.
A sensible sequence from here
- Confirm your perimeter position: which of the new regulated cryptoasset activities you carry on, and whether you have a UK establishment.
- Treat 30 September 2026 as a submission date, not a start date — build the application pack before the gateway opens.
- Gap-analyse against FSMA requirements rather than MLR ones; assume nothing carries across automatically.
- Decide deliberately whether you also need MLR registration in the interim, and document the reasoning.
- Check the FCA’s gateway pages before you rely on any date here — the timetable is expressed as expectation and has moved before.
The checklist behind this article
The working document behind this: an 11-page readiness checklist for the FCA cryptoasset gateway, with the rule, article number or published FCA statement cited behind every item, and the open questions marked as open rather than guessed at. Seven activity heads with RAO article numbers, permanent minimum requirement by activity, the application pack, SM&CR, and the eight failure modes the FCA has published. USD 149, with the updated edition free when the September 2026 fee notice and the autumn perimeter guidance land.