HMT consults on changes to appointed representatives regime

HM Treasury has launched a consultation on proposed reforms to the appointed representatives (ARs) regime, following its August 2025 policy statement. The aim is to strengthen confidence in the regime, enhance consumer protection and maintain its broad, cost-effective structure, so firms can engage in regulated activity without being authorised, allowing a broader range of providers to enter the marketplace.

Key proposals include:

• An FCA permission to act as principal. The government proposes to introduce a regulatory gateway for authorised firms wishing to act as principal. The new permission regime would be modelled on section 55NA of the Financial Services and Markets Act 2000 (FSMA). This would provide the FCA with a specific mechanism to scrutinise prospective principals and ensure they are suitable, with the necessary expertise, resources and systems in place to provide effective oversight of ARs. Detailed requirements on the contractual relationship between principals and ARs will be contained in FCA rules.
• A targeted extension of the UK Financial Ombudsman Service (FOS) compulsory jurisdiction, through amendments to FSMA, to ensure that all consumers of regulated financial services, whether dealing with an authorised firm or an AR, have access to the FOS on a consistent basis. In cases where the FOS determines that a principal firm cannot be held responsible for its AR's acts or omissions, the FOS will be able to directly consider the complaint against the AR itself.
• Bringing ARs within scope of the Senior Managers and Certification Regime. Principal firms would apply fit and proper requirements to their ARs and a new dedicated AR senior management function could be created.

The deadline for comments is 9 April.

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