In October 2021, the FCA issued an online survey to a sample of principal firms of AR networks. The survey was issued in late October and had a due date for responses in December.
The FCA has seen an increased level of harm across all sectors where firms have ARs and is carrying out further work at its gateway for authorisations and more targeted supervision to reduce the most significant risks from principals and ARs. It has also consulted in 2022 on changes to its rules governing this regime to improve and strengthen it. This will include changes to require more timely information on principals and their ARs and to improve principals’ ongoing oversight and due diligence of current and prospective ARs.
The data collected via the survey will inform FCA policy development for the future and will support its supervisory work on Appointed Representatives.
The survey asked principal firms to provide information about their ARs and about their own business in relation to Appointed Representatives. The FCA was keen to ensure that firms completed the survey in full, and reminded them to provide all the information requested.
The FCA has confirmed that there will be another S165 information request issued to all firms with one or more ARs, on or around 8th December. Firms will have 60 days to complete the return. Questions will be more refined but in the main, the form will be the same as the previous one. The data will be similar to the data that will be required for a new AR appointment. Firms should look at the forms at the end of the final guidance as the information is provided there. This will also apply for Introducer Appointed Representatives (IARs) although the data required will be less for IARs.
If a firm intends to cancel an AR, it will still be required to complete the S165, so firms may wish to process any intended AR cancellations as soon as possible to take them out of scope. It would be expected that any ARs that are ‘live’ circa two weeks prior to 8th December will be captured in the S165.
After this initial S165 request, the annually required revenue and complaints data should be collected via a RegData data item after the first year. In the first instance, it will be captured in the S165 request.
The FCA has advised that it will not seek to add more AR information to the Register at this point as that is not deemed to be helpful to consumers. It has noted however that some minor changes may be added to the Register where firms have ARs, to better explain the relationship between principals and ARs and also to direct consumers to the principal if they need more information on the activities that a particular AR can undertake.
If you’d like to know more about how we can help you with your Appointed Representatives monitoring or FCA survey arrangements, or with any other regulatory compliance issues, our expert team is here to help.
Contact us today on 0207 436 0630 – or email info@thistleinitiatives.co.uk.
Compliance Star
Our team has assisted numerous firms with their FCA survey responses. Compliance Star, an on-demand compliance platform and part of the Thistle Group, can provide you with the right tools for effective monitoring and risk management within AR networks, including financial testing, fit and proper individuals, complaints monitoring and AR audits. For more information and to request a free demo of the platform, call 0203 859 0056, email sales@compliancestar.co.uk or visit compliancestar.co.uk