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Compliance Portal
August 11, 2025
HMT has published a Policy Statement about the Appointed Representatives (AR) regime, in which it sets out that the Government views the Appointed Representative regime as playing an important part in the provision of UK financial services, and that it provides a proportionate and cost-effective way for firms to engage in regulated activity without being authorised. In the Policy Statement, HMT has set out its overall approach to the regulation of ARs, and has outlined what it sees as two key, targeted and proportionate reforms.
The Government intends to preserve the AR regime in its current scope. There are now around 34,000 ARs operating under around 2,400 authorised firms.
The proposed targeted reforms to the legislative framework for ARs will help prevent misconduct involving ARs (a ‘Principal Permission’) and provide appropriate consumer protection when things go wrong (the ability to complain to FOS about an AR).
Authorised firms wishing to use ARs will need to first obtain a new ‘Principal Permission’ from the FCA – this will enable the FCA to ensure authorised firms have appropriate expertise and resource to effectively oversee their ARs and ensure they act responsibly:
- Existing Principal firms will not need to reapply.
- The FCA will be able to limit, vary or revoke a Permission to act as a Principal firm if this is necessary.
- To introduce a new ‘Principal Permission’, it will likely be necessary to amend S.39 of FSMA 2000, which will require primary legislation, so the reform can only be delivered once the legislative reform programme allows.
Consumers will be able to take a complaint to the Financial Ombudsman Service (FOS) if they are unable to resolve a dispute involving an AR where the authorised firm is not responsible for the issue in dispute.
- This will close a gap in current consumer protections and will help to ensure that there is consistent access to redress.
- This will not diminish the high level of responsibility and oversight that Principal firms are required to provide for their ARs.
- The proposal to extend FOS jurisdiction to ARs will be developed to be consistent with the conclusions of the FOS review.
HMT has confirmed that the Government will consult on the details of these proposed reforms in due course.
ICS receives queries related to potential sources of business and Appointed Representatives on a regular basis, so please contact us on .
