If you (a principal firm) want to take on an Appointed Representative (AR) it’s important that you understand the responsibilities. As the AR will be covered under your FCA permission you (the principal firm) assume full accountability for the AR’s compliance.
We work to help you fully understand how to oversee and monitor your AR’s to ensure they remain compliant.
Why Do Businesses Have Appointed Representatives?
One of the reasons principal firms bring on AR’s is to generate revenue. The AR’s typically pay a fee for the right to operate under the firm’s permissions. This can lead to a fruitful relationship for the principal firm and the AR.
Do You Want To Bring In An Appointed Representative?
Our team can guide you through the Appointed Representative process smoothly.
Monitoring an Appointed Representative
The FCA expects you (as the principal firm) to evidence your AR is fully compliant in due diligence, monitoring and written agreements. If you fail to demonstrate compliance of the appointed representative, it can cause significant risk to you.
Due Diligence requires thorough vetting of each company and its directors before entering the agreement. Once the agreement has been made, the firm needs to provide sufficient regulatory frameworks and resources to the appointed representatives. The appointed representative must have sufficient operating capital, along with a senior management team that is deemed fit and proper.
Ongoing monitoring should be demonstrated by documenting a risk-based monitoring regime customised to the details and character of each appointed representative. Principal firms must also show that they have the resources to continually fulfil their monitoring obligations.
Written agreements must conform to guidelines recorded in the FCA handbook. They should enumerate the activities to be performed by the appointed representative under the aegis of the principal firm’s authorisation, and should include explicit descriptions of the ongoing monitoring programme and confirmation that each side agrees to such monitoring.
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