Appointed Representatives Regime targeted for reform amid concerns

AR arrangements have generated exponentially more complaints and supervisory cases than equivalent directly-authorised firms. Now, the Financial Conduct Authority is consulting on enhancements to the AR regime, while HM Treasury is calling for evidence on how effectively it operates. Charlotte Hill and Ahmed Razzaq examine the consultation, HMT’s call for evidence, along with the potential impact of policy proposals and reforms.

Charlotte Hill is a partner and head of the Financial Services Regulatory group at Taylor Wessing in London, where Ahmed Razzaq is an associate. Contact them on c.hill@taylorwessing.com and a.razzaq@taylorwessing.com.

The Appointed Representatives (AR) regime, which has been in place for over 30 years, plays a significant role in the provision of financial services in the United Kingdom. An AR is a firm (or person) who carries on a regulated activity on behalf and under the responsibility of a principal firm that is authorised by the FCA. The principal assumes responsibility for the regulated activities carried out by the AR. In this way ARs can carry on regulated activities within the UK without breaching the general prohibition or needing to be exempt persons. [1]