Notice for Firms on the FCA’s improved Appointed Representatives regime
Firms should be making changes to their governance arrangements and systems and controls to ensure that they are ready to comply with ongoing requirements as soon as possible.
Waystone Compliance Solutions has published on its website a notice for firms (see link below) summarising the key changes affecting firms that currently have ARs or intend to have ARs in future, and the key steps Principals should be taking to ensure compliance with the new requirements.
Topics covered in the notice include:
- Section 165 data request
- New notification requirements for firms
- New monitoring and controls requirements over ARs, including
- Establishing potential risk for consumers and market integrity
- Assessing AR’s directors’ competence and capability
- Overseeing AR’s ‘as if they were employees of the firm’
- Collecting MI and data from ARs
- Changes to contractual agreements
- Annual reviews & board annual self-assessment
In the immediate term, firms should start preparing to answer the Section 165 request for information by the FCA which will be sent out to all Principal firms between 8 December 2022 and 10 December 2022. This will be sent to the Principal firm’s “Principal User” on Connect. Firms should verify that their Principal User’s details on Connect are correct and up to date. Principal firms may also want to review their contractual arrangements with ARs to ensure they are capable of obtaining the required information.
Principal firms have until 30 November 2023 to carry out their first annual review for each individual AR and to complete their first annual self-assessment of how the firm is meeting the requirements in SUP 12.
Principal firms will also be required to submit revenue and complaints data for each of their ARs starting from accounting reference dates falling after 1 December 2023.
Our notice for firms provides preliminary guidance for firms on how to comply with the new requirements. It also contains information for Waystone Clients on how to obtain our detailed AR Rules Guide.
Waystone Compliance Solutions can support Principal firms to meet their obligations by providing guidance materials for practitioners and advice from our experts. We can also support Principal firms with a RegTech solution to help manage and evidence control over their AR portfolio. Please contact us for more information.