The Mystic Arts Regulatory Commission, MARC

The MARC is an authoritative body responsible for the comprehensive regulation and control of the mystical arts. They operate as a department under the Parliament of Peers, diligently monitoring spellcasters and issuing licenses for magical activities. Their close relationship with the Royal Enquiry strengthens their ability to address potential magical threats and maintain order in the city.   Magic users are treated with immense suspicion in New Neverwinter, due to their history with the Order. As such, the MARC was quickly established by the first meeting of the Parliament of Peers. The MARC's duties are covered by several departments of the parliament, and is overseen by the Lord General, the Lord Justice, the Lord Enquirer and the Lord Academic. However, they are most interwined with the Royal Enquiry, and so Lord Enquirer Gerrit Ravenshade is widely regarded as the leader.   The MARC specifically covers arcane magic, but they do also work with the Lord Spiritual to regulate divine magic users.
Pact magic and sorcerers are notoriously difficult to monitor and control, and so often get away without a licence. However, this is against the laws (legally, they have to surrender themselves to the council and are then licenced and monitored).   The Guild of the Eternal flame (despite every member generally disliking the MARC) work tirelessly to ensure every member is licenced. The licence process itself takes a week or two, and costs around 70gp (a cost the Guild often subsidises. Alternatively, the military provides a free licence in exchange for service). The licence lasts 5 years.   Casting magic without a licence is punishable by exile from the city, and your citizenship from the Lords Alliance can even be terminated (which makes employment and travel difficult, and voting impossible). Depending on the severtity of the magic, the penalty can even extend to death.
Only licenced spellcasters can purchase arcane focuses, magic items or spellcasting components. Being caught with an arcane focus but not a licence is obviously incriminating, so many illegal spellcasters are forced to do without them.   Within the old city of New Neverwinter, all spellcasting is illegal (except for in designated zones, such as the Ignis Institute or the House of Wisdom). In the outer city, magic is still illegal but much harder to enforce. As such, only the more obvious and/or destructive spells are actually illegal. Minor infractions are mostly ignored in the outer city.
In the low lantern, magic is totally unregulated.