The FCA’s Business Plan for 2023/24, covered in overview in our earlier post, reiterates the FCA’s focus on reducing misconduct that can cause serious harm, and includes six commitments and related actions the FCA plans to take over the coming year.
Principal firms, appointed representatives (ARs) and anyone considering entering an AR relationship should note the FCA’s continuing commitment to improving oversight of ARs.
This follows the introduction of new rules which came into force in December 2022 (see our posts here and here for a recap). The new regime strengthens the responsibilities and expectations of principals and imposes new information requirements. The Business Plan suggests, unsurprisingly, that the FCA is keen to monitor how the changes are playing out.
The Business Plan states that in 2023/24 the FCA will start to test that firms are properly embedding the new rules across the AR regime. The FCA also intends to continue to use significantly improved data to better target resources at the regulatory gateway and in supervision, strengthen its scrutiny at the gateway and undertake more assertive supervision of high-risk principals.
As well as embedding the new rules, principal firms and ARs are also reminded that further potential legislative changes and policy interventions are possible in this area.
The proper oversight of ARs by principal firms therefore remains a key area of concern for the FCA. Principal firms should accordingly ensure they have properly adjusted to the new regime and stay alert for further developments.
Consumers are at risk of being mis-led and mis-sold, while misconduct by ARs in the financial sector can undermine market integrity.
https://www.fca.org.uk/publications/business-plans/2023-24#lf-chapter-id-focus-1-reducing-and-preventing-serious-harm