UK Government - Targeted reforms to the Appointed Representatives Regime - 2025
In August 2025, the UK Government published a Policy Statement on the Appointed Representatives (ARs) Regime.
The Policy Statement sets out the responses received to the UK Government's Call for Evidence in 2021 (see below). The Government has identified two regulatory gaps in the framework for ARs:
- Ensuring the suitability of authorised firms to act as principal. Any authorised firm is permitted to act as a principal and appoint ARs, with no further permission or approval needed from the FCA. The Government has concluded that this represents a gap in the ability of the FCA to ensure appropriate standards are maintained within the perimeter for regulated activities. FSMA 2000 has been amended so that authorised firms wishing to approve financial promotions must seek permission from the FCA. This gives the FCA the opportunity to scrutinise applicant firms and ensure that authorised firms engaging in this activity are suitable and properly equipped to do so to an appropriate standard. However, the government has concluded that a regulatory gateway would be appropriate for principal firms, as this would allow the FCA to ensure that authorised firms wishing to act as a principal have the necessary expertise, resources and systems in place to provide effective oversight of ARs. Introducing a gateway would likely require an amendment to section 39 of FSMA 2000. The Government, working with the FCA, will develop a detailed proposal for design and implementation of the principal permission and will consult on the proposal in due course.
- FOS coverage of ARs that act outside of their contract with the principal firm. The Government intends to use a targeted extension of the FOS compulsory jurisdiction to ensure that all consumers of regulated financial services, whether dealing with an authorised firm or an AR, have access to the FOS on a consistent basis. The Government, working with the FCA and the FOS, will develop a detailed proposal for the extension of FOS jurisdiction and will consult on the proposal in due course.
FCA information on Appointed Representatives
On the FCA's website the following information can be found regarding Appointed Representatives:
- Responsibilities and how to oversee your appointed representatives
- Becoming an appointed representative
- Onboard, change or terminate an appointed representative
- Move from being an appointed representative to being directly authorised
FCA - Improvements to the Appointed Representatives Regime - 2022
On 3 August 2022, the FCA published PS22/11 Improvements to the Appointed Representatives regime. The Policy Statement summarises and responds to feedback received by the FCA to the proposals in CP21/34 Improving the Appointed Representatives regime for changes to information and notification requirements (Chapter 3) and responsibilities of principals and the FCA's expectations (Chapter 4). The Policy Statement also provides an overview of the responses to possible areas for further change (Chapter 5). Now the Policy Statement has been published, the FCA will be considering the next steps on the discussion topics.
The Policy Statement includes the final Handbook rules and guidance and updated forms. The 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.
A response from HM Treasury to the The Appointed Representatives regime: Call for Evidence is expected imminently.
FCA Consultation (CP21/34) and HM Treasury Call for Evidence - 2021/2022
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 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 have collaborated with the HM Treasury on its The Appointed Representatives regime: Call for Evidence. 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.
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