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    Appointed Representative: Myths and Facts



    Appointed Representative: Myths and Facts

    There are some common misconceptions about what it means to be an Appointed Representative (‘AR’). We’ve put together a list of some of the most common myths and facts of being an AR.

    “Becoming an AR is easier than being directly authorised”

    This is one of the most common things that is said about the benefits of becoming an AR rather than directly authorised by the FCA. And, whilst it is often true there is something very important to note, the process of becoming an AR may be quicker but the threshold of conducting regulated activities under a Principal firm are the same, you must demonstrate that you meet what is known as the Threshold Conditions;

    • Location of offices
    • Effective supervision
    • Appropriate resources
    • Suitability
    • Business model

    “You can use any regulated firm’s licence to be an AR”

    Appointed Representatives may only become an AR of a Principal firm which holds the permissions which the AR requires. For example, a firm looking to offer their consumers access to credit to purchase goods or services by introducing them to a third party lender, would need a Principal firm which holds Credit Broking permissions.

    “ARs don’t have to report financial information to the FCA”

    ARs do not need to report data such as financial information directly to the FCA (unless the regulator requests specifically). However, Principal firms do need to report data to the FCA via their regulatory reporting which includes information about their ARs. This means that you will need to provide a Principal firm with this information.

    “ARs can have as many Principal firms as they want”

    Some activities do allow firms to have more than one Principal firm. However, you must have what’s known as a multi-principal agreement in place between your principal firms and you cannot have a Principal firm for the same permission type as another.

    “ARs have to trade in the name of their Principal Firm”

    ARs are their own distinct trading organisation or sole trader. ARs can trade using their own trading styles and limited company name.

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