Riding The Compliance Licencing Rollercoaster

After a short hiatus, we welcome back to our pages Compliance guru Alex Henderson. This week Alex changes it up with a compelling insider guide to the do's and don'ts of applying for that new, all-important operating licence.

There can be no doubt that the process of applying for, and obtaining, a Compliance licence for a new market is one of the toughest challenges in the business; not to mention the fun and games of launching into a new market after the licence is granted.

Over the past 15-years I have had the pleasure of working on many licence applications, some with the Financial Conduct Authority (FCA) prior to transitioning to the gambling industry, and then many more with the various gambling regulators.

It does not get any easier, and with every new application I somehow manage to look back and wish I had done things a little differently, even better.

An important factor in the application process is the regulator themselves.

Some are clearly better than others in terms of laying out the requirements for an application and then being clear along every step of the journey. This can make a huge difference, as many of us know.

If a regulator changes their application process frequently, or the staffing of the application assessors has a huge variation in competence and experience, it can have a big impact on an operator.

A perfect example of this can be found in many European countries.

Applications for licences can have a lot of ups-and-downs, prompted by revolving changes in the authority themselves or less experienced assessors. This results in a slower process overall and internal frictions across departments that are involved.

This is not a criticism of any specific regulator, as they face, in many ways, the same challenges as operators, such as: staff turnover and moving regulatory goalposts over which they have no control. This often puts operators in a difficult position when trying to navigate requirements and guide their internal teams.

And it can be made worse by an ever-evolving project plan or roadmap.

Some regulators on the other hand make the process very simple, with clear milestones, detailed requirements with supporting guidance — and regular engagement to address any delays or blockages.

Unfortunately trying to get all regulators to learn from best practice is the same as having this expectation on operators. It would be ideal but every jurisdiction has its own interpretations and risk assessments of regulations, as do operators.

So how can we make this easier? And what would be useful to operators, especially for Compliance colleagues who may not have undertaken an application before, or even for us more seasoned Compliance personnel?

I would like to outline some things I have found useful, mostly from learning from my own mistakes or shortcomings. Optimistically, it will also be useful for regulators to better understand the challenges for operators — and how they could also adjust their approach to make for a smoother journey.

Design a roadmap and involve the wider business from the get-go:
The most important part of any application is ensuring that from top to bottom, everyone in the business knows the journey and expectations. There should be complete alignment on the deadline, notably the go-live date, and milestones to be achieved. The roadmap should be designed prior to starting the application process.

Onboard key personnel to work on the application, not just within Compliance but across the board if it is needed:
Trying to move around resources can cause the waterbed effect of creating pressure somewhere else in the business. I have personally struggled in the past because I got this wrong. Thinking I could handle an FCA Licence application many years ago on my own with minimal support ultimately ended up with a delay in the application and launch. I learned this lesson the hard way.

Establish clear, regular communication with the regulator or authority:
Of course this is heavily dependent on the regulator themselves being open to good communication. This step can make or break the smoothness of an application. If you can get answers and answer questions promptly, everything becomes a little easier. Needless to say, this will make the launch and ongoing relationship with the regulator an all-round better experience.

Finally, stick to the roadmap–without deviation–as much as possible:
We have to allow for critical circumstances and scenarios out of our control. Barring disaster, sticking to the plan keeps everyone in the business working to deadline, and makes lives easier. From a Compliance Officer perspective, not moving the goalposts also means you can continue your focus on multiple projects at the same time as you know that the roadmap is being adhered to.

This, of course, is a very best case scenario.

Realistically, and most likely, an application will take place when you are under-resourced, short of time and managing 1,000 projects; undoubtedly more challenging, but also, arguably, more fun. After all, if everything were plain sailing, what would us Compliance folk have to complain about?

But seriously, and most fundamentally, having a good team around you to build and stick to a project plan is paramount and will ultimately deliver a more successful launch into that compelling new market.

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