The Financial Conduct Authority (FCA) is clamping down on businesses with appointed representatives (ARs).
Between 8 and 12 December, the regulator has sent principal firms a mandatory Section 165 data request to gather information on ARs.
Section 165 under the FCA Enforcement Guide gives the watchdog the power to “require information and documents from firms to support both its supervisory and enforcement actions”.
The move follows the introduction of enhanced rules targeted at the supervision of ARs in August 2022.
The FCA is now asking principal firms information on their ARs and introducer ARs (IARs), including:
- The reasons for any appointments;
- The nature of their regulated business;
- Whether any unregulated business is conducted and, if so, the nature of the business;
- Anticipated revenue;
- The nature of financial arrangements between the principal and the AR(s); and
- Complaints information and whether the AR is part of a group.
Principal firms will have until 28 February 2023 to respond.
Details
The FCA said that the Section 165 request is a one-off regulatory action, but under the enhanced rules, firms will need to provide information on an ongoing basis via annual reporting as well as when an AR is appointed or when their activities change.
The request will apply to any AR and/or IAR that was permitted to conduct regulated activity using a principal’s permissions on 8 December 2022, the regulator added.
Less information is being asked about IARs because they have a more limited scope of permitted activities.
The FCA added: “The data you submit through this request will inform our supervisory work on principals and ARs across sectors and portfolios.
“If we have questions, or find incomplete data or questions that have been misunderstood, we may ask you for clarification, or to review or resubmit the data.”
