The FCA has published an updated regulatory guide to help smaller credit brokers understand what the regulator expects of them. Crucially, it is not just for directly authorised firms: the guidance also applies to businesses carrying out credit broking under a principal.
Published in May 2026, the Regulatory Guide for Credit Brokers is aimed primarily at smaller firms, generally those with fewer than 10 employees. It covers the day-to-day realities of running a compliant business, from promoting services and treating customers fairly to handling complaints, submitting regulatory reports and responding to supervision. It also includes a dedicated section for appointed representatives (ARs) and introducer appointed representatives (IARs).
Compliance is about more than permissions
The guide is a reminder that compliance is not simply a matter of holding the right permissions or signing an agreement with a principal. What matters is how those arrangements work in practice.
For a firm operating as an AR, the key question is whether the business is as effective as the principal expects and staying within the agreed scope of activities.
That means taking a close look at the details: financial promotions, customer communications, complaints handling, staff responsibilities and the checks and controls that support the business. These are the areas where good intentions need to translate into consistent processes.
For IARs, the boundaries are narrower still. The FCA defines an IAR as an AR whose activities are limited to sharing non-real-time financial promotions and introducing consumers to its principal. Knowing exactly where those limits sit and making sure the business does not stray beyond them is essential.
Thinking about becoming an AR?
The guide is just as useful for firms considering an AR arrangement as it is for those already operating under one. Reading it early can help shape better questions before any agreement is signed.
Choosing a principal should involve more than finding a firm willing to make the appointment. A prospective AR needs to understand which regulated activities it will carry out, where its own responsibilities begin and end, what oversight the principal will provide, and what information or reporting will be required. In short, both sides should be clear about how the relationship will work before it begins.
This reflects the FCA’s wider focus on robust due diligence and ongoing oversight of ARs. Risks should be identified before an appointment is made, then reviewed and managed throughout the relationship not treated as a one-off exercise.
A practical place to start
The guide does not replace the FCA Handbook, and the FCA is clear on that point. Its value lies in making the regulator’s expectations easier for smaller firms to navigate and showing how those expectations may apply in everyday situations.
For both existing and prospective ARs, it is best read alongside the AR agreement, the principal’s compliance framework and the relevant FCA rules. Together, those sources provide a fuller picture of what a firm needs to do and how the principal will oversee it.
Becoming an AR does not remove the need to understand your regulatory responsibilities. Instead, it changes how those responsibilities are shared which is why a clear, well-managed relationship between the AR and principal matters so much.
