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Improving the Appointed Representatives regime

08 Dec 2022

Thursday 8 December 2022 is an important day for the Appointed Representatives (AR) regime in the UK. The rule changes set out in the FCA’s Policy Statement 22/11 come into effect, raising the bar for all firms operating in the sector.

The AR regime brings a number of benefits for the UK economy – not least by allowing entrepreneurs to get off the ground quickly without the substantial time and cost associated with direct FCA authorisation. More importantly, those enterprises can flourish, safe in the knowledge that institutional-grade compliance infrastructure and expertise is being provided by their regulatory host.

However, historically, some principal firms have cut corners. They have taken on ARs without the right controls to understand those businesses and their risks, or the ability to monitor their activities closely. This has resulted in some poor outcomes for end customers.

The move to improve the AR regime dates back to early 2019, when the FCA issued a ‘Dear CEO’ letter scolding regulatory hosting firms for “significant shortcomings in the control and oversight of ARs.” The landscape looks much improved today, although it is only with the publication of these new rules in August 2022 that principal firms have really assessed whether they are properly equipped to manage ARs.

After a four-month run-up to allow firms time to prepare, the new rules take effect today, 8 December 2022. Throughout the preparation period, IQ-EQ’s UK Regulatory and Compliance Solutions team has shared a series of insights highlighting the significance of the new rules, outlining the key changes, and pointing ARs in the right direction.

Now, to mark the implementation date, we’ve compiled all of our recent insights into one concise paper that we hope will help guide our clients and contacts forward in this enhanced regulatory environment:

Download the Insights paper

If you have any questions, please don’t hesitate to get in touch.

Working with IQ-EQ has been seamless – you and your team understand our business, advise us appropriately, and handle your side of our collective partnership so that we can focus on making good investment decisions. Evan Gibson SVP, Merchants Capital

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