The following Financial Services practice note provides comprehensive and up to date legal information covering:
This Practice Note explains the contractual requirements as between a firm—referred to as a principal—and its appointed representative (AR) under Chapter 12 of the Supervision manual (SUP 12) of the Financial Conduct Authority (FCA) Handbook. For an overview of an AR's appointment and activities, see Practice Notes: Appointed representatives and A principal's responsibility for its appointed representatives.
This Practice Note only covers contractual requirements as between an AR and its principal. It does not cover contractual requirements as between principal and principal, ie multiple principals. For guidance on multiple principals and responsibility for ARs, see Practice Note: Multiple principals and appointed representatives.
A principal who conducts regulated activities under a Part IV permission and who engages an AR to conduct some of those activities on its behalf must enter into a written contract with the AR that:
permits or requires the AR to carry out a category of business listed in the Financial Services and Markets Act 2000 (Appointed Representatives) Regulations 2001, SI 2001/1217 (AR Regulations), and
complies with the requirements set out in the AR Regulations
This compliance requirement also applies to the activities of ARs who are individuals and to the employees, representatives and introducers of AR firms.
SUP 12 and the AR Regulations set out the required contract terms to be entered into. The principal must accept responsibility, in writing, for the authorised activities
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