FCA introduces new rules for appointed representatives

The UK’s financial watchdog has announced new rules to make authorised financial firms more responsible for their appointed representatives (ARs).

ARs are not currently authorised by the Financial Conduct Authority (FCA) – they can offer certain financial services or products under the responsibility of authorised firms, known as principals.

Principal firms are responsible for ensuring their ARs comply with the FCA’s rules.

The regulator said that while some principals do this effectively, many “do not adequately oversee the activities of their ARs”.

It added that the rules help prevent consumers being mis-sold or mis-led by ARs.

Under the new rules, principal firms need to apply enhanced oversight of their ARs, including ensuring they have adequate systems, controls and resources.

They will also need to assess and monitor the risk that their ARs pose to consumers and markets, providing similar oversight as they would to their own business, and review information on their ARs’ activities, business and senior management annually, and be clear on the circumstances when they should terminate an AR relationship.

"While appointed representatives can bring innovation and choice, principals and ARs account for more than 60 per cent of the total value of recent claims to the Financial Services Compensation Scheme,” said Sheldon Mills, executive director for consumers and competition. “They also generate up to 400 per cent more supervisory cases and complaints than other directly authorised firms."

Mills added: "The changes we’re making will help ensure that principals manage their ARs better – ensuring that they provide the oversight needed to avoid consumers being mis-sold or mis-led and to make sure markets can operate safely and fairly. They will also need to provide us better data and information to support our own work."

    Share Story:

Recent Stories


Data trust in the AI era: Building customer confidence through responsible banking
In the second episode of FStech’s three-part video podcast series sponsored by HCLTech, Sudip Lahiri, Executive Vice President & Head of Financial Services for Europe & UKI at HCLTech examines the critical relationship between data trust, transparency, and responsible AI implementation in financial services.

Banking's GenAI evolution: Beyond the hype, building the future
In the first episode of a three-part video podcast series sponsored by HCLTech, Sudip Lahiri, Executive Vice President & Head of Financial Services for Europe & UKI at HCLTech explores how financial institutions can navigate the transformative potential of Generative AI while building lasting foundations for innovation.

Beyond compliance: Transforming document management into a strategic advantage for financial institutions
In this exclusive fireside chat, John Rockliffe, Pre-Sales Manager at d.velop, discusses the findings of Adapting to a Digital-Native World: Financial Services Document Management Beyond 2025 and explores how FSIs can turn document workflows into a competitive advantage.

Sanctions evasion in an era of conflict: Optimising KYC and monitoring to tackle crime
The ongoing war in Ukraine and resulting sanctions on Russia, and the continuing geopolitical tensions have resulted in an unprecedented increase in parties added to sanctions lists.