The power, which was granted via the Financial Services Act 2021, will allow the FCA to start the cancellation process as soon as it considers the permissions are not being used, and will serve 14 days’ notice on a firm.
The regulator will then be able to vary or cancel permissions after one month.
It added that the change would help prevent scams and improve transparency to consumers as incorrect or outdated permissions can be misleading.
Companies on the financial services register, which this power applies to, are required to confirm whether information on the register is accurate on an annual basis.
FCA’s executive director of enforcement and market oversight Mark Steward said: “We want to use this power to take quicker action to prevent consumers being misled. It is part of our transformation and drive to be more assertive, drawing on an innovative approach and using new streamlined processes to make important regulatory interventions.”
He added: “Firms can and should apply to have their permissions cancelled if they no longer plan to use them but many fail to do so.
“We understand that business models may evolve over time and there may be valid reasons why regulatory permissions are not being used, but unless firms notify us and keep their permissions up to date, they will risk losing market access.”
The consultation on the guidance will run until 29 October.