Read our key considerations for becoming an appointed representative (AR) and find out what you'll need to prepare for your principal firm.
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1
Which regulated activities will you carry out?
Consider which regulated activities you want to carry out and find a principal firm that has permission to carry out that business.
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2
Do you want to be an AR or an IAR?
Consider if you want to be an AR or an introducer appointed representative (IAR). An IAR can only carry out a limited range of activities, ie undertaking introductions and distributing financial promotions.
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3
How many principals do you want?
Think about how many principals you want – this will depend on the type of business you carry out and the type of customers you have. Most ARs have 1 principal but some have more. Some regulated activities can only be carried out under a single principal.
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4
What contracts will you need?
Find out what contracts you need to have in place. You'll need to have a written agreement with your principal firm(s).
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5
Is your principal ready to notify us?
Your principal(s) must notify us of your appointment 30 calendar days in advance and provide information about you. Some of this information will be added to our Financial Services Register[1].
What to prepare
Your principal will carry out checks to make sure you're financially solvent and competent, as they will be responsible for the business you carry out.
You will need to comply with our rules and your principal will oversee your activities.
Be prepared to provide your chosen principal with the following information:
- The nature of your regulated activities.
- If you conduct any non-regulated activities and whether they're financial or non-financial – you should provide details of these activities.
- If you will provide services to retail clients.
- If you were part of a previous principal firm and the reason for changing.
- If you are part of a group, provide the name of the parent group and explain:
- Whether any individuals will be seconded or contracted to the principal firm to carry on portfolio management and/or dealing activities.
- The rationale for this arrangement.
If your principal asks you for more information to help complete their AR notification requirements with us, be ready to provide this.
AR agreement
S19 of Financial Services and Markets Act 2000 (FSMA 2000)[2] sets out that no person can carry out regulated activities unless they are authorised or exempt. This is known as the general prohibition. To be exempt, the AR must have an AR agreement written by the principal.
This is a written contract between the AR and the principal clearly stating what regulated activity you can carry out on behalf of your principal. This should be agreed by both parties before the AR joins the principal.
