In the United Kingdom an appointed representative (“AR”) is an arrangement whereby a person or firm is able to arrange deals in investments and advise on investments by acting as an agent for a firm (Principal) which is directly authorised by the Financial Conduct Authority (FCA). The Principal takes responsibility for ensuring the AR is compliant with all relevant FCA regulation.
A few advantages of becoming an Appointed Representative:
- Applying for direct authorisation from the FCA can be costly and time-consuming (an application an take up to 6 months to process);
- It may be more efficient and cost-effective for a small business to be an AR rather than obtain direct authorisation;
- On-going compliance costs for an AR are likely to be much less than for a firm with independent authorisation;
- AR’s do need not comply with the regulatory capital requirements themselves.