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.
Background
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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