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June 3, 2024
Since the implementation of the new Appointed Representatives regime the FCA has carried out work to assess how well Principal firms oversee and monitor their ARs. As soon as the new regime was introduced on 8th December 2022, the FCA wrote to Principal firms asking for information about their ARs. Since then the FCA has continued to engage with Principal firms, for example, by carrying out short telephone interviews or more in-depth thematic work.
Recently, the FCA has undertaken some sector-specific assessments of the key harms and drivers of harm caused by ARs and Introducer Appointed Representatives (IARs).
The FCA wants to improve Principals’ oversight of their ARs and has offered examples of good practices as well as areas for improvement it has identified in Principal firms’ due diligence checks and ongoing monitoring of ARs.
The publication of the FCA’s recent findings builds on its Policy Statement and work to improve the AR regime. The guidance the FCA’s examples refer to can be found in SUP 12 in the FCA Handbook.
The guidance in the recent publication covers:
- the initial appointment of ARs and IARs;
- ongoing monitoring of ARs and IARs; and
- ending AR and IAR relationships.
The FCA has highlighted that it will act where it identifies where firms do not have adequate oversight of their ARs. Therefore, all Principal firms who have ARs should consider the FCA’s findings and guidance, addressing any gaps in respect of their initial and ongoing monitoring of ARs.
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