FCA to consult on new rules about Appointed Representatives

July 2021


Last week, on 15th July, the FCA issued its 2021/2022 Business Plan which set out the Regulator’s priorities for the coming year over three of the six sections of the Plan; consumer priorities, wholesale markets priorities and priorities across all markets.

Within the ‘wholesale markets’ section the FCA has set out a plan to consult on new rules about Appointed Representatives as part of its efforts to raise standards in the Appointed Representatives regime.

The FCA has said that many principal firms have poor due diligence and oversight of their ARs and that it will increase its supervision to reduce the most significant risks from Appointed Representatives in wholesale markets.  The FCA has also stated that it will “consult on cross-sector changes to improve and strengthen the elements of the AR regime”.

The FCA’s aim is to ensure that principal firms and ARs are competent, financially stable and that they ensure fair outcomes for consumers.  The cross-sector changes may impact all financial services sectors and not just those that the FCA sees as being ‘wholesale markets’.

It seems that the more hard-hitting Appointed Representative work might be in the wholesale markets sectors rather than what it sees as the ‘retail’ sectors, but there clearly are plans for some strengthening of reporting / data-gathering / oversight and due diligence requirements.  This is perhaps a ‘watch this space’.  We will keep firms updated as and when the consultation process progresses.

 


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