Improvements to the Appointed Representatives’ Regime

The FCA has published a Policy Statement PS22/11 which sets out the responses and their feedback to their proposed changes to the AR regime, plus the final rules.

The Appointed Representatives (AR) regime is set in primary legislation. It allows self-employed representatives to engage in regulated activities without having to be authorised. While the regime has benefits, the FCA has identified a wide range of harm across all the sectors where principals and ARs operate. Where harm occurs, it is often because principals do not undertake adequate due diligence before appointing an AR, and/or due to poor ongoing control and oversight.

Consultant Paper

The FCA’s proposals (in CP21/34) focused on two main areas of change aimed at addressing the harms identified and protecting consumers. These were:

• collecting additional information on ARs and strengthening reporting requirements
  for principals
• clarifying and strengthening the responsibilities and expectations of principals.

The CP also included a discussion chapter, seeking views on potential areas of future change. The FCA developed this alongside the Treasury’s Call for Evidence (CfE) on the regime, which explored potential legislative changes. Treasury is currently analysing the responses to its Call for Evidence and will set out the next steps in its review of the AR regime in due course.

Policy Statement

This Policy Statement (PS) summarises and responds to feedback received from the the CP. The FCA also provide an overview of the responses to the discussion chapter and will be considering the next steps on the discussion topics after publishing this PS. The PS also includes their final Handbook rules and guidance and updated forms.

These changes will take effect on 8 December 2022 following a four‑month implementation period.

The FCA have put in place transitional arrangements to give firms more time to comply with some of the new rules, particularly those requiring them to submit information on an on-going basis and to review their ARs and self-assess annually.

Click here to read the full policy statement: PS22/11: Improvements to the Appointed Representatives regime (fca.org.uk)

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