A Business Plan is not a Regulatory Business Plan: Why authorisation in the UK and EU requires a different level of precision
4 February 2026
When preparing for authorisation, many founders say the same thing:
“We already have a business plan. Can we submit that?”
Commercially, it sounds reasonable. Regulatorily, it rarely works.
A traditional business plan is written to attract capital. A regulatory business plan is written to earn permission.
They answer different questions, for different audiences, with very different standards of scrutiny.
This applies whether you are applying to the Financial Conduct Authority in the UK or to European regulators such as the Commission de Surveillance du Secteur Financier, Bundesanstalt für Finanzdienstleistungsaufsicht or Autorité des marchés financiers.
Across all of them, the expectation is the same: operational proof, not commercial promise.
What a commercial business plan does well
A standard business plan tells a growth story.
It explains:
• the strategy • the market opportunity • the product • the team • the revenue model • the upside
It is persuasive and optimistic by design. It exists to convince investors, partners and boards that the opportunity is attractive.
That is exactly what it should do.
But regulators are not investing in you.
They are supervising you.
And that shifts the lens completely.
What a regulatory business plan must demonstrate
A regulatory business plan is not a pitch document. It is an operating blueprint.
Supervisors want evidence that your firm is built to function safely under stress, not just successfully in good markets.
So the document must show:
• governance and decision making structures • clearly allocated responsibilities • risk management and controls • compliance oversight • operational resilience • capital and liquidity adequacy • conflicts management • outsourcing oversight • wind down planning
In short, not “how you grow”, but “how you remain safe and solvent at all times”.
Whether under MiFID II, Alternative Investment Fund Managers Directive or UK prudential regimes, the principle is consistent across jurisdictions.
The structural difference in practice
A commercial plan reads like strategy.
A regulatory plan reads like engineering.
A business plan might say: “We plan to launch two funds and scale to €500m AUM.”
A regulatory plan must explain: Who approves each product? How is valuation performed? Who independently oversees risk? How are conflicts recorded and mitigated? How much capital is required in stressed scenarios? What happens if fundraising is delayed? How do you wind down without harming clients?
Supervisors expect detail that is operational, not aspirational.
Why a specialist regulatory plan matters even more in the EU
In continental Europe, the bar is often even more documentary and process driven.
Regulators such as the CSSF, BaFin and AMF typically expect:
• granular organisational charts • defined substance and local presence • documented procedures for each control function • consistency across financials, policies and governance • clear segregation of duties • evidence the framework is already embedded, not theoretical
Generic or investor-style plans tend to trigger extensive follow up questions and delays.
Precision shortens timelines. Ambiguity lengthens them.
A helpful mindset shift
Treat the regulatory business plan as infrastructure.
It becomes:
• your target operating model • your governance map • your supervisory narrative • the document regulators and investors rely on to understand your firm
Done well, it is not something you file away after approval. It is how you actually run the business.
That is exactly what supervisors want to see.
The bottom line
A business plan explains why your firm will succeed. A regulatory business plan proves why your firm can be trusted.
Across the UK and Europe, authorisation is granted to firms that demonstrate control, resilience and clarity.
The more your plan reads like a working operating manual, the smoother the process becomes.
Regulation rewards preparation, not persuasion.