The UK’s Financial Conduct Authority has cautioned adviser firms over the challenges and expectations in overseeing and communicating effectively with overseas appointed representatives (OAR).
In a recent briefing note, the regulator said feedback to its consultation on improving the appointed representatives regime showed that may create difficulties due to differences in legal, accounting and regulatory requirements for each jurisdiction and geographical distance cultural and language differences.
“Principal firms should consider whether customers dealing with an OAR will receive equivalent services, protections and outcomes as those dealing with UK-based appointed representatives (ARs).
“If not, firms should make sure customers are given suitable information to alert them to any differences.”
The FCA also said “principals must establish on reasonable grounds, on a continuing basis, that the activities of their OARs do not result in undue risk of harm to consumers or market integrity”.
It further warned that “if you cannot adequately monitor the activities of an OAR, or if it does not carry on regulated activity in the UK, you should consider terminating the agreement”.
