FCA has confirmed its new rules to make principal firms more responsible for their ARs. The package of rules, which will take effect from 8 December, will:
- require principals to notify FCA of future AR appointments 30 days before the appointment takes effect;
- mean firms with current ARs will receive a s165 request from FCA, asking for data on those ARs to be sent to FCA within 60 days;
- require principals to provide more information on the business of their ARs, although the proposals have been slimmed down from the consultation version so as to be more proportionate in relation to non-financial services activities of the AR;
- require firms to provide complaints data and revenue information for their ARs on an annual basis;
- introduce a definition of “regulatory hosting”, and require that firms wishing to provide that service will need to notify FCA in advance of their intention to do so. It is not an application for approval, but will allow FCA time to consider whether the would be host has effective systems and controls in place;
- require firms to apply enhanced oversight of ARs – again, the proposals have been watered down slightly, to give firms more flexibility on how they carry out monitoring of their ARs.
Disappointingly, FCA is not taking forward the proposal to include more information on the Register about what ARs can do. It says respondents said consumers would not find it useful. It is planning on making some changes that it says will make the links between principals and ARs clearer, however.
FCA also warns that further change might come in the light of the Treasury’s separate call for evidence on the operation of the regime.