HM Treasury has published a consultation on proposals to amend the UK legislative framework for Appointed Representatives (ARs), aiming to address concerns about weak oversight by some principal firms while preserving the current scope and benefits of the AR regime. The package centres on introducing an FCA “gateway” for firms that want to act as a principal, extending the Financial Ombudsman Service (FOS) compulsory jurisdiction in limited circumstances to cover complaints against ARs, and aligning AR conduct and accountability requirements with the Senior Managers and Certification Regime (SM&CR). The consultation proposes amending the Financial Services and Markets Act 2000 (FSMA) to require authorised firms to obtain FCA permission to act as a principal, with the FCA able to grant permissions with terms or restrictions and to vary or cancel permissions, including on its own initiative. Existing principal firms would not need to apply and would be deemed to have permission, although some could be limited to appointing Introducer ARs only unless they seek a variation. HM Treasury also proposes moving detailed requirements on principal–AR contracts and Financial Services Register requirements from legislation into FCA rules, and repealing FSMA section 39A on tied agents. On consumer redress, the FOS would continue to handle most AR-related complaints via the principal, but would gain the ability to consider a complaint directly against an AR where the principal is not responsible under FSMA section 39 or otherwise. HM Treasury does not propose extending FCA DISP 1 complaint-handling rules to ARs, and expects any additional Financial Services Compensation Scheme (FSCS) impact to be immaterial, with no changes proposed to the FSCS framework. For accountability, ARs would be brought within scope of a reformed SM&CR, with conduct rules applied directly to ARs, fit and proper requirements applied via principal firms, and scope for the FCA to create a dedicated AR Senior Management Function in principal firms. The consultation is open for eight weeks and closes on 9 April 2026. HM Treasury and the FCA will set out a more detailed implementation plan and timetable once legislative changes are in place, and implementation of the FOS jurisdiction extension is intended to apply to relevant AR conduct occurring after a specified future implementation date.
HM Treasury 2026-02-12
HM Treasury launches consultation on reforms to the Appointed Representatives regime including an FCA permission for principals and targeted FOS and SM&CR changes
HM Treasury has launched a consultation to amend the UK legislative framework for Appointed Representatives (ARs), focusing on enhancing oversight by principal firms while maintaining the AR regime's benefits. Key proposals include an FCA "gateway" for principal firms, extending the Financial Ombudsman Service's jurisdiction, aligning AR conduct with the Senior Managers and Certification Regime, moving detailed requirements from legislation to FCA rules, and repealing FSMA section 39A on tied agents.