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Authorised Activities vs Prohibited Activities
This guidance explains how the Neves licensing framework distinguishes authorised activity from prohibited activity. It is intended to support correct operational scope after licensing and reliable verification by counterparties.
Purpose of This Guidance
This document is issued to clarify the difference between authorised activities and prohibited activities under the Neves licensing framework. It addresses scope boundaries, common risk areas, and practical expectations for licensed entities and third-party verification.
Core Principle: Authorisation Is Activity-Specific
licenses granted by the Authority are activity-specific. A license does not create a general permission to conduct financial business. A licensee is permitted to conduct only the activities expressly authorised under its license and recorded in its public register entry.
What Is an Authorised Activity?
An authorised activity is an activity that falls within the license category and is explicitly permitted by the license terms and scope of permissions. Authorised activities must be carried out in a manner consistent with the license conditions, governance expectations, and any applicable restrictions.
- Clearly described in the license scope
- Reflected on the public register as permitted
- Aligned with the licensed business model
- Supported by appropriate governance and controls
- Execution-only activity where the entity is licensed for execution-only operations
- Intermediary introductions where the entity holds an introducing license
- Market making where the entity is licensed as a market maker and has the necessary controls
What Is a Prohibited Activity?
A prohibited activity is any activity that is not authorised under the license scope or that exceeds a license’s stated permissions, conditions, or limitations. Prohibited activity includes both substantive activity and regulated representations that imply permissions not granted.
- Conducting services beyond authorised activities
- Holding client funds where not authorised
- Operating execution or dealing functions without the correct license
- Presenting marketing claims that overstate scope
- Using “regulated” or “licensed” broadly without specifying scope
- Offering products that imply permissions not held
- White-label structures where scope responsibilities are unclear
- Referral arrangements that drift into execution or custody
Scope Changes and license Variations
Businesses evolve. Where a licensee intends to add activities, change operational models, or expand the nature of services offered, the correct approach is to seek a license variation or additional authorisation prior to commencing the new activity.
Licensees should not assume that operational expansion is permissible because it is technically feasible or commercially similar to an existing permission. The relevant test is whether the activity is authorised in the license scope.
Verification Expectations for Counterparties
Counterparties should verify scope using the public register and should confirm that the activity being proposed aligns with the authorised activities listed. Verification should be performed using the legal name of the entity and relevant reference information.
Conclusion
The distinction between authorised and prohibited activity is central to maintaining market integrity and reliable licensing outcomes. Licensees are expected to operate strictly within scope and to ensure that all representations to the public and counterparties accurately reflect authorised activities.
