Blog: Changes To The FCA’s Appointed Representative Regime … – Mondaq

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Changes To The FCA’s Appointed Representative Regime

18 January 2023

Herrington Carmichael

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On the 8th December 2022, the Financial Conduct Authority
(“FCA”) made changes to Chapter 12 of the Supervision
Manual (SUP 12) of the FCA Handbook, which is concerned with the
appointed representative (“AR”) regime.

The appointed representative regime allows ARs to engage in
regulated activities without having to be FCA authorised. The FCA
notes in PS22/11 that whilst the regime has benefits, they are
infact seeing a wide range of harm across a multitude of sectors
where AR’s are appointed. This is due to the fact that their
principals are failing to undertake the necessary due diligence
before their appointment, or once their role has begun, their
principals are failing to provide an adequate level of oversight
and/or control.

Consequently, further compliance requirements have been
implemented on principals to ensure:

  • additional and more timely information of the AR’s is
    provided to the FCA, including the process in which the AR’s
    are overseen (Chapter 3, SUP 12); and
  • they adhere to the strengthened principal responsibilities and
    expectations (Chapter 4, SUP 12).

It is important for businesses to ensure these changes have been
implemented within their policies and procedures, and that AR
agreements have been reviewed to ensure that these enhanced
compliance requirements can be met. The FCA has confirmed that they
will be sending principal firms a section 165 request which
requires them to provide information about their AR’s, the
nature of their regulated business, anticipated revenue etc. This
should have been received by principals between 08th –12th
December 2022, and the deadline for completion is the 28th February
2023.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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