What Is Credit Broking? FCA Permissions Explained
Credit broking means introducing people to lenders or hirers, or helping them take out regulated credit. This guide explains the FCA permissions, how to apply and the...
Read the guideSPECIALIST SERVICES
FCA Regulated • Appointed Representative SupportCredit Broking Compliance Consultants
A clear, controlled credit-broking model, from permissions to monitoring.
Comprehensive support for credit brokers operating as Appointed Representatives or seeking direct FCA authorisation. We help you navigate the regulatory framework, whether you're building an AR network or operating as a Principal Firm.
SERVICE OVERVIEW
Credit Broking Authorisation and Compliance
Make your credit-broking model, lender relationships and customer journey clear and controlled.
Credit brokers, introducers, intermediaries and principal firms managing broking activity. A proportionate permissions, conduct and monitoring framework for credit broking.
Evidence we help you build
- Broking permissions and model map
- Lender and introducer due diligence
- Customer journey and disclosure controls
- File review and monitoring programme
Typical timeframe
If you are applying for your own permission: Ready to submit within 6 weeks, often sooner
Under FSMA the FCA must decide within 6 months of receiving a complete application, or within 12 months of receiving an incomplete one. The appointed representative route is agreed with a principal firm, which must notify the FCA before the appointment, rather than applied for to the FCA.
Ideal for
- Credit brokers
- Introducers and intermediaries
- Principal firms managing broking activity
- Appointed Representatives
Support routes
- For Appointed Representatives
- For Principal Firms
- For Direct Authorisation
How MEMA helps you
- Map the broking model
- Check the chain
- Review the customer journey
- Test the files
- Set up monitoring
How MEMA Supports Credit Brokers
Comprehensive support for ARs and Principal Firms
For Appointed Representatives
Support for credit brokers operating under a Principal
- Principal Firm selection guidance
- AR agreement review
- Compliance framework setup
- Training and competence programmes
- Ongoing regulatory support
For Principal Firms
Building and managing compliant AR networks
- AR network structure design
- Due diligence frameworks
- Monitoring and oversight systems
- AR agreements and documentation
- FCA liaison and reporting
For Direct Authorisation
Alternative to the AR model - full FCA authorisation
- FCA application preparation
- Business plan development
- Permissions guidance
- Post-authorisation compliance setup
- Ongoing regulatory advisory
How MEMA helps
Broking looks simple and is heavily conditioned: the permission, the disclosures, the commission arrangements and the introducer chain all have to hold together.
- 1Map the broking modelExactly what you do — introduce, arrange, or something the perimeter treats differently — and the permissions that follow from it.
- 2Check the chainLenders, introducers and any unregulated parties in the flow are assessed, because responsibility does not stop at your own front door.
- 3Review the customer journeyDisclosure, commission transparency and the point of sale reviewed against what a customer is entitled to know and when.
- 4Test the filesA sample of real cases reviewed against the framework — the evidence that the controls operate rather than merely exist.
- 5Set up monitoringA recurring review programme with management information, so file quality is tracked rather than sampled once.
Understanding the Appointed Representative Model
How the AR framework works for credit broking businesses
Appointed Representatives
Operating under a Principal Firm
Credit brokers who conduct regulated activities on behalf of a Principal Firm
Key Features
- No direct FCA authorisation required
- Operate under Principal's permissions
- Principal responsible for AR activities
- Lower regulatory burden on AR
- Faster route to market
Requirements
- Agreement with an authorised Principal Firm
- Compliance with Principal's policies
- Ongoing training and competence
- Activity reporting to Principal
- Consumer Duty compliance
Principal Firms
Managing an AR network
FCA authorised firms that take responsibility for Appointed Representatives
Key Features
- Full FCA authorisation required
- Ability to appoint ARs
- Responsible for AR compliance
- Network management capabilities
- Enhanced oversight obligations
Requirements
- Appropriate FCA permissions
- Robust AR oversight framework
- Due diligence procedures
- AR monitoring and supervision
- Financial resources for AR activities
Principal Firm Oversight Obligations
FCA requirements for firms managing Appointed Representative networks
Due Diligence
Comprehensive AR vetting processes
- Background checks on AR principals
- Financial stability assessment
- Competence and capability review
- Business model evaluation
- Fit and proper assessments
Ongoing Monitoring
Continuous AR supervision and oversight
- Regular compliance monitoring
- Activity and transaction reviews
- Complaint analysis
- MI reporting and analysis
- Periodic AR assessments
Training & Support
Ensuring AR competence and compliance
- Initial compliance training
- Ongoing CPD programmes
- Regulatory update communications
- Policy and procedure guidance
- Competence assessments
Risk Management
Managing risks from AR activities
- AR risk assessments
- Financial crime controls
- Conduct risk monitoring
- Remediation when issues arise
- Termination procedures
Key Credit Broking Compliance Requirements
What the FCA expects, and the evidence behind it.
Activity scope
Define introductions, arranging, advising and exclusions.
Lender relationships
Evidence due diligence, oversight and remuneration controls.
Customer outcomes
Review disclosures, vulnerability and fair treatment.
Monitoring
Test files, communications and conduct controls.
Credit Broking Activities
Understanding what credit broking involves and regulatory requirements
Credit Introduction
Introducing customers to credit providers
- Customer referrals to lenders
- Credit matching services
- Application facilitation
- Commission arrangements
Credit Arrangement
Arranging regulated credit agreements
- Credit agreement negotiation
- Terms and conditions discussion
- Application processing
- Documentation support
Credit Advisory
Providing advice on credit products
- Credit product recommendations
- Adequate explanations (CONC 4.2)
- Matching products to customer needs
- Consumer protection compliance
Lender Relationships
Managing relationships with credit providers
- Panel management
- Commission negotiations
- Service level agreements
- Performance monitoring
Compliance Obligations
Meeting regulatory requirements
- Consumer credit regulations
- Affordability checks
- Clear disclosure requirements
- Consumer Duty outcomes
Business Development
Growing your credit broking business
- Marketing compliance
- Lead generation
- Conversion optimisation
- Customer retention
What you will need to produce
- Broking permissions and model map
- Lender and introducer due diligence
- Customer journey and disclosure controls
- File review and monitoring programme
Define the broking role
The scope depends on how the firm introduces, arranges, advises and is paid.
- Activity map
- Document introductions, arranging, advice, lender selection and any exclusions.
- Relationships
- Set expectations for lenders, introducers, remuneration, conflicts and oversight.
- Customer disclosures
- Make the role, service, fees, options and limitations clear to customers.
Control the customer and lender journey
The framework should test conduct in live cases and communications.
- Due diligence
- Review lender and introducer governance, service dependencies and escalation.
- Vulnerability and complaints
- Provide support routes and analyse complaints and customer outcomes.
- Monitoring
- Use file reviews, promotion testing, MI and remedial action to challenge the model.
Critical Considerations for Credit Brokers
Key regulatory and business factors to address
- Consumer credit regulation compliance
- Affordability and creditworthiness checks
- Clear disclosure of fees and commissions
- Clear, fair and not misleading communications (CONC 3)
- Financial promotions compliance
- Consumer Duty implementation
The Credit Broking Compliance journey
The route from scoping your permissions to a decision. The FCA's part of it is fixed; the preparation before it is where applications are won or lost.
- 1Establish your role in the credit chainIntroducing, arranging and presenting are different activities, and the lenders and introducers around you affect what you are responsible for.
- Confirm which broking activity you carry on
- Map lenders, introducers and any unregulated party in the flow
- Weigh direct authorisation against appointed representative status
- 2Evidence disclosure and oversightBroking comes down to whether the customer is told what they are entitled to know, when, and whether you can show it happened.
- Build commission disclosure and point-of-sale controls
- Set up due diligence over lenders and introducers
- Prepare the file review programme that evidences it
- 3Submit to FCASubmitted through the FCA's Connect portal with the application fee of £1,130.
- Complete submission through Connect
- Application fee paid at submission
- Case officer assigned by the FCA
- 4FCA reviewThe statutory determination period is 6–12 months — six months for a complete application, twelve if it is incomplete when submitted.
- Case officer raises questions on the submission
- Further information requests answered and evidenced
- Weak responses, not complexity, are the common cause of delay
- 5Permission grantedPermission is granted and the firm can carry on the regulated activity, subject to any requirements attached to it.
- Permission recorded on the Financial Services Register
- Any limitations or requirements confirmed
- Reporting and supervision obligations begin
A defined route for smaller firms
Limited-permission secondary credit broking
See who may qualify, what our fixed-fee authorisation project covers and what sits outside the scope.
Explore the focused packageRelated FCA Guidance
Deeper reading on the regulatory framework behind credit broking.
- CONC: Consumer Credit SourcebookThe FCA rules covering lending, broking, debt management, and credit information.
- Consumer Credit AffordabilityAffordability assessment requirements and responsible lending standards.
- PERG: Perimeter GuidanceUnderstanding which credit broking activities require FCA authorisation.
Sectors We Support
This service is available for firms across these regulated sectors
Explore our other services
End-to-end support across the full regulatory lifecycle.
Appointed Representative FAQs
Common questions about the AR model in credit broking
What is an Appointed Representative in credit broking?
An Appointed Representative (AR) is a credit broker that conducts regulated activities on behalf of a Principal Firm, operating under the Principal's FCA permissions. This provides a faster route to market without needing direct FCA authorisation.
What are Principal Firm responsibilities for ARs?
Principal Firms must conduct due diligence on ARs, provide ongoing monitoring and supervision, ensure AR compliance with regulations, manage financial resources for AR activities, and maintain robust oversight frameworks as required by the FCA.
Ready to Build Your Credit Broking Business?
Whether you're becoming an AR or building a Principal Firm, we're here to help
Phone: 0330 133 0811
Email: contact@memaconsultants.com