Appointed Representative and
Principal Firms

An Appointed Representative (often referred to as an “AR”) is a firm or individual that, due to a formal relationship it has with an FCA authorised firm, can conduct specific regulated activities without themselves being authorised by the FCA to do so.

Appointed Representatives are not authorised by the FCA. Instead, they are registered with the FCA by an authorised firm that, in this context, is referred to as a ‘Principal Firm’ or just ‘the Principle’.

Through their relationship, the Principal allows the Appointed Representative to conduct certain regulated activities that the Principal is authorised by the FCA to undertake. The Principal is responsible for the compliance of the Appointed Representative, and therefore, it’s common for the Principal to charge the Appointed Representative for their ongoing relationship.

Principal Firms are responsible for establishing the suitability of an Appointed Representative before appointing them, applying and seeking permission for the appointment of an Appointed Representative and maintaining sufficient oversight of each Appointed Representative’s compliance with the FCA’s rules. Principal Firms must also ensure that the ongoing appointment of the Appointed Representative does not adversely affect their ability to comply with the FCA’s rules, including the threshold conditions.

As Introducer Appointed Representative’s are restricted in what they can do, it generally carries less risk of non-compliance and therefore the registration process is shorter.

An Appointed Representative on the other hand is able to conduct the regulated activity in their own right and is not limited in the same way as an Introducer Appointed Representative. However, similar limitations can be implemented within the agreement required to be appointed by the Principal. Failure to comply is then a breach of the agreement and not a compliance breach by the Principal Firm.

You can read more about being an Appointed Representative on the FCA website or by downloading our free guides below.

Please note that Conducting regulated activities without the correct authorisation is a criminal offence as it would breach Section 19 of the Financial Services and Markets Act 2000, often referred to as the General Prohibition. Speak to one of our experts today for confidential and no obligation advice about claims management authorisation.

Approved Persons and Controlled Functions

Controlled functions are designated to individuals within a firm who is an Appointed Representative (AR) (other than Introducer Appointed Representatives) of an FCA authorised firm or ‘Principal firm’.

A Control Function may only be held by someone who has been approved by the FCA and is typically understood to be ‘Approved Persons’.

Due to the implementation of the Senior Managers & Certification Regime (SM&CR), the Approved Person Regime no longer applies to FCA regulated firms, but it still applies to their Appointed Representatives. This also means that SM&CR does not apply to Appointed Representatives.

From December 2019 and as a result of SM&CR, a large number of controlled functions were removed for AR, with the remainder typically associated with executive positions e.g. for a director of an AR.

Approved persons have to meet the FCA’s fit and proper person requirements and must comply with the approved persons conduct requirements. More information on these matters can be found on the FCA website or by downloading our free guides below.

Approved persons at Appointed Representative firms do not have to apply to the FCA themselves, the Principal firm should do this for them. The Approved Persons(s) for an AR will be entered into the FCA public financial service register.

Individuals holding a controlled function can be held personally accountable by the FCA and in the event of failings this can lead to personal fines that the individual themselves must pay.

How can MEMA Support a Principal Firm?

MEMA has a experience of helping both Principal Firms looking to onboard an Appointed Representative and Appointed Representatives seeking direct authorisation themselves.  If you are an Appointed Representative or want to become one and would like some advice, or to learn more about being an Appointed Representative, please contact us today.

As a Principal Firm or one who is considering becoming one, you should be aware of the risk that is involved with having one or more Appointed Representatives. We can assist you with any part of the journey, whether you want to talk about what the onboarding process involves right through to helping you monitor the compliance of your Appointed Representatives.

To name just a few, we can help you by:

  • Identifying which form of Appointed Representatives a proposed or current Principal firm may require I.e. Appointed Representatives and Introducer Appointed Representatives.
  • Advising on the FCA’s rules as applicable to each form of Appointed Representative and the specific rules and requirements to meet before the appointment of an Appointed Representative.
  • Establishing a framework for onboarding of an Appointed Representative to help ensure that your firm appropriately onboards them.
  • Creating and implementing a Compliance Monitoring Framework for your firm to utilise once an Appointed Representative has been onboarded. This helps Principals to comply with relevant FCA rules on an ongoing basis.
  • Completing online applications to the FCA to register and seek approval for an Appointed Representative.
  • Conduct ongoing monitoring reviews and audits to provide compliance monitoring feedback and management information to help ensure you maintain appropriate oversight over the activities of your Appointed Representatives.

If you want to know more amount becoming a Principal Firm, speak to one of our experts today.

FCA Authorisation

If you are looking to become authorised by the FCA, MEMA can help.

Each applicant who works with MEMA is assigned a dedicated Regulatory Adviser who will support you throughout your application, answering queries you may have relating to the application and providing you with guidance and support.

The process starts with a fact find between yourself and one of our Regulatory Advisors where we’ll get to know you and your business and how you intend to provide your services.

We will provide you with advice and guidance on how to comply with the FCA’s requirements and identify any risks.

We will then produce for you a series of documents to support your application and help ensure that you become authorised. These documents include a Regulatory Business Plan and Compliance Monitoring Plan. We also produce a compliance manual for you containing documentation for you to implement into your business upon authorisation to help enable you to comply with the FCA’s requirements.

An online application will then be completed along with all relevant forms, which will then be submitted to the FCA. Should there be any FCA questions, your Regulatory Adviser will work with you to draft a full response.

In short, we’re here for our clients every step of the way. We provide our clients with the benefit of our knowledge and experience to not only help ensure that your application is successful, but that your business has the right foundations to ensure positive customer outcomes.

Ongoing FCA Compliance

As an FCA authorised person or firm, you might need help to ensure you comply with the FCA’s rules.

We provide our clients with support they need to maintain compliance and avoid breaching the rules. Our bespoke service is individually tailored to each of our client’s requirements and objectives to help them meet in the best way possible.

Whether you need documentation to help you remain compliant, want ongoing advice or support, impartial monitoring of your activities or anything else, MEMA may be able to help.

Why Choose MEMA?

Get started!

MEMA has been supporting firms through the FCA compliance process since 2019. In that time, we have helped hundreds of businesses to successfully gain and retain FCA authorisation.

We have a unique blend of experience from ex-regulators, big 4 consultants and fin/regtech specialisation. Our team is highly experienced and expertly skilled. We specialise in providing our clients with solutions to often complex regulatory requirements and compliance needs.

Our unique industry insight and comfort with compliance enables our team to support you to the fullest extent possible, helping to develop your business model and compliance.

Contact us

April 11, 2021

FCA Threshold Conditions

Firms that apply for FCA authorisation have to meet the Financial Conduct Authority's minimum standards to become authorised – known as the “Threshold Conditions”.

More about us

August 10, 2022

Financial Crime- Understanding the FCA Handbook rules

MEMA has produced this financial crime series for firms, to understand the steps they can take to reduce their financial crime risk. It does not include all the financial crime risks a firm may face but provides an understanding of FCA expectations in this complex field.

More about us

Navigate the New Financial Crime Landscape with FCA's Updated Guide and MEMA Consulting's Expertise

In response to evolving regulatory landscapes and recent global events, the Financial Conduct Awareness (FCA) has unveiled proposed updates to its Financial Crime Guide, CP24/9. The revisions aim to enhance sanctions systems, address proliferation financing, and refine transaction monitoring with a focus on modern technologies like Artificial Intelligence and cryptoassets. With these updates, the FCA seeks to fortify financial crime prevention measures and ensure firms are well-equipped to meet new challenges. As firms adapt to these changes, MEMA Consulting stands ready to offer expert guidance and tailored support, helping businesses align with FCA's stringent standards and navigate this complex regulatory terrain effectively.

More about us

Insights

July 26, 2021

Regulation of the funeral plan market

On 5 July 2021, the Financial Conduct Authority (FCA) launched a consultation (CP21/20) on its proposals for regulating the pre-paid funeral plan sector. This is part of an extensive regulatory change in the pre-paid funeral plan market. Under the proposals, the FCA will take over regulation from the Funeral Planning Authority (FPA) on the 29th July 2022.‍
More about us
December 29, 2022

What is the Appointed Representative Regime?

In this series of articles, MEMA will break down what is the Appointed Representative Regime and what steps your organsiation will need to take.
More about us
April 20, 2023

FCA's New Consumer Duty Takes Center Stage Amid Cost of Living Crisis

The Financial Conduct Authority (FCA) has highlighted its focus on ensuring good consumer outcomes in its latest Business Plan, selecting 'putting consumers' needs first' as one of its four priority areas for the upcoming year. This comes in response to the ongoing cost of living crisis, and the FCA is committing additional resources and headcount to Consumer Duty-related activities.
More about us
August 7, 2022

Preparing for the TPR Regime

The Temporary Permissions Regime ('TPR') was designed in response to Brexit to ensure that European firms operating in the UK via a passport could continue operating temporarily while they seek full authorisation in the UK.
More about us
May 16, 2022

Learn how to conduct Wind Down Planning

The FCA recently completed a thematic review of wind-down processes across a number of business models. The review was aimed at reviewing firms on whether they held the appropriate liquidity, examining intragroup dependencies and wind-down triggers.
More about us
January 7, 2022

FCA Fee Cap on CMCs

You will be aware that the FCA’s price cap is coming into existence on 1 March 2022. As a quick primer, this means there will now be five redress bands with a maximum fee charged per band.
More about us
February 6, 2023

5 Steps for Conducting Effective Compliance Control Monitoring for Financial Firms

Compliance control monitoring is a crucial aspect of maintaining regulatory compliance for financial firms. The Financial Conduct Authority (FCA) requires firms to have robust controls and monitoring systems in place, and it is up to individual firms to implement these measures effectively. In this article, we will discuss the steps that firms can take to conduct compliance control monitoring.
More about us
April 11, 2021

FCA Cryptocurrency Regulation Part 1

From 10 January 2020, the FCA became the anti-money laundering and counter-terrorist financing (AML/CTF) supervisor for crypto firms, covering firms that exchange money to and from crypto assets and those that safeguard their customers crypto assets.
More about us
April 28, 2022

How you can enhance your financial crime controls

The Financial Conduct Authority has released its key findings from its recent review of financial crime controls at several challenger banks. There are quite a few takeaways you can take to actively enhance your systems and controls.
More about us
September 26, 2022

How much are the FCA fees?

The common question we receive when firms are deciding whether to get authorised or not as an FCA regulated firm is how much will it cost?
More about us
May 2, 2021

Estate agency guidance for money laundering supervision- Part 1

If you are supervised by the HMRC for anti-money laundering purposes, you will need to meet requirements under the Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations 2017.
More about us
April 11, 2021

Preparing for your annual FCA Reporting Requirements

Your firm is due to submit its regulatory return(s) within 30 business days of your Accounting Reference Date. Reporting requirements apply to all firms with permissions to carry on regulated claims management activities, including firms with temporary permissions.
More about us
January 31, 2022

New restrictions on the financial promotions of crypto assets

The Financial Conduct Authority (FCA) has launched a consultation paper (CP22/2) on financial promotion rules for high-risk investments, including crypto assets.
More about us
March 31, 2023

Horizon Scanning for Compliance Officers in UK Banking & Payment Services Sector: Key Strategies

Horizon scanning is a key component of this role, as it helps compliance officers stay informed of emerging trends, changes in regulations, and technological advancements that could impact their organization. In this article, we'll provide key strategies and best practices for successful horizon scanning in the UK banking and payment services sector.
More about us
January 20, 2023

FCA's Portfolio Strategy on Claims Management Companies: A Detailed Compliance Guide for CMC Firms

The Financial Conduct Authority (FCA) recently released its Portfolio Strategy on Claims Management Companies (CMCs) outlining its approach to regulating this sector and identifying key risks.
More about us

Your key contacts

ADEMOLA OMOSANYA

Ademola is an accomplished consultant with over a decade of experience across regulation, banking, and consumer credit. As MEMA Consultants co-founder, he leverages extensive regulatory expertise to guide clients through critical processes and full compliance. His experience across sectors enables tailored solutions to complex business challenges. Ademola partners with clients as a strategic advisor to help futureproof their business through an in-depth understanding of the regulatory landscape.

MISAH MARAGH

Misah is a director at MEMA Consultants with over a decade of experience in financial services. Holding a legal background and postgraduate qualification, she previously worked at the Financial Conduct Authority. Misah has led compliance transformation for global consumer services organisations across Europe, the Caribbean, and Latin America. Her expertise includes implementing compliance frameworks for financial regulations, FCPA, UK Bribery Act, data privacy, and Sarbanes-Oxley. Misah is skilled at advising clients on operational and strategic projects, leveraging her in-depth knowledge of regulatory environments to deliver solutions tailored to complex business needs.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Appointed Representative
And Principal Firms