Appointed Representatives regime to be reviewed by FCA and Treasury

Written by Zhuan Faraj

On 24 September 2021, the House of Commons Treasury Committee published responses from HM Treasury and the FCA to the Treasury Committee’s inquiry on Greensill Capital. The responses cover a range of issues, including accepting the recommendation to consider reforms to the Appointed Representatives (‘AR’) regime.

The regime currently allows ARs to carry on certain regulated activities without direct authorisation from the FCA, provided they are subject to oversight by an FCA authorised firm (its principal).

A number of actions are being taken in respect of the rules:

• HM Treasury has already begun to review the regime, and will consider legislative reforms to strengthen oversight of ARs and prevent opportunities for abuse of the system.
• HM Treasury also plans to issue a Call for Evidence to gather views from a broad range of stakeholders on the overall aim, scope, benefits, and risks of the current AR regime.
• In the coming weeks the FCA will be sending a data request from firms that use ARs, and HM Treasury is working closely with the FCA to take into account the evidence gathered through that exercise.
• As set out in the FCA’s 2021/22 Business Plan, the FCA will be consulting this autumn on changes to its rules governing the AR regime.

For further information the responses can be read in full here.