A principal's responsibility for its appointed representatives
A principal's responsibility for its appointed representatives

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • A principal's responsibility for its appointed representatives
  • What is a principal?
  • What are a principal's responsibilities?
  • Thematic review of principals and ARs in the general insurance sector
  • ARs must act within scope of principal's permission
  • Responsibility for the actions of an AR
  • Threshold conditions
  • Principal's controls and resources to monitor and enforce compliance
  • Good repute and competence
  • AR's solvency, suitability and close links
  • More...

This Practice Note provides an introduction to some of the regulatory responsibilities and contractual requirements that firms authorised by the Financial Conduct Authority (FCA) or Prudential Regulation Authority (PRA), or 'principals', have in relation to their appointed representatives (ARs). It discusses such issues as appointing an AR, conducting verification, entering into a contract and the notifications that a principal must make to the FCA in relation to its ARs.

What is a principal?

A 'principal' is a firm directly authorised by the FCA and/or the PRA to perform regulated activities under Part 4A of the Financial Services and Markets Act 2000 (FSMA 2000), and which engages a person or firm to conduct some or all of those regulated activities on its behalf. The appointed person may be an AR or a tied agent, but in both cases the principal is responsible for making sure that the AR or the tied agent meets FCA and/or PRA requirements at all times. The requirements a principal must meet in relation to its AR or tied agent are contained in Chapter 12 of the Supervision manual (SUP 12) of the FCA Handbook. For further information on who can become and AR and how, see Practice Note: Appointed representatives, and for tied agents, see Practice Note: Tied agents.

What are a principal's responsibilities?

As described in further detail below, where a principal contracts

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