FCA review – managing risks from inactive appointed representatives

Are you a principal firm?

If so, read on and then let’s talk.

The FCA has published the findings from a review of how principal firms manage potential risks arising from inactive appointed representatives (ARs).  The review sets out good practices and areas for improvement across four key themes: reporting of AR regulated revenue, engagement with inactive ARs, monitoring of consumer-facing materials, and the adequacy of AR agreements.

The FCA  is clear in its findings that acting as a principal firm cannot be a passive role. Principals are responsible for the regulated activities of their ARs throughout the entirety of their relationship and the FCA expects them to demonstrate that responsibility through active oversight.