01 Jun 2022

In early December 2021, both the FCA and HM Treasury published consultations relating to the Appointed Representatives regime (AR regime). The AR regime was created to allow self-employed representatives to engage in regulated activities without having to be authorised. Over time, it has evolved to include a wider range of business models across sectors and markets.

In CP21/34 Improving the Appointed Representatives regime the FCA have proposed changes to the AR regime with the aim to reduce potential harm and ensure that the regime delivers good outcomes for consumers and markets.  The FCA have seen a wide range of harm across all the sectors where firms have ARs. They believe that this harm often occurs because principals don’t perform enough due diligence before appointing an AR, or from inadequate oversight and control after an AR has been appointed. The FCA proposals:

  • require principals to provide additional and more timely information on their ARs and how these are overseen, and
  • clarify and strengthen the responsibilities and expectations of principals

Additionally, they are seeking views, through a discussion chapter, on other potential areas of policy change.

The FCA have collaborated with the HM Treasury on its Call For Evidence on the Appointed Representatives Regime. This is asking for evidence on how market participants use the AR regime; how effectively the regime works in practice; potential challenges to the safe operation of the regime; and possible future reforms.

Both the FCA and HM Treasury requested responses by 3 March 2022. AREF’s Public Policy Committee are monitoring the progress of these consultations. The FCA plan to publish a Policy Statement in Q3 2022.

 

Author

Jacqui Bungay

Jacqui Bungay

AREF Policy Secretariat , AREF

Jacqui is AREF’s Company Secretary and provides policy guidance and secretariat services to  AREF’s Board and Management Committee as well as the following sub-committees and working groups: Investor Committee, Public Policy Committee, Research and Information Committee, Retail Funds Committee, Residential Funds Working Group and Technology & Innovation Forum.

Jacqui joined AREF in 2014 after working for over 25 years in fund compliance, client relationships and administration in the trustee and depositary sector.