Context
HM treasury has launched an AR regime ‘call for evidence’ on how market participants use the regime, how the regime works in practice, the potential challenges to the safe operation of the regime, and possible future reforms. Since the regime began in 1986, the use of ARs has increased and spread across much of the financial services sector. There are now around 40,000 ARs operating under around 3,600 principal firms. This consultation will remain open for three months until 3rd March 2022.
Key points to note
The document:
- sets out a broad introduction to and history of the AR regime and provides an overview of the current regime, looking at the history and policy aims, and the uses and benefits, of the Regime;
- considers the regulation of the regime across several sub-sections, including an examination of the split of regulatory responsibilities between HM Treasury and the FCA, the fitness of Principal firms, the FCA’s ability to ensure proper regulatory oversight by principals and the scope of the regulated activities that an AR may carry on;
- outlines possible options for adapting the regulatory approach for ARs, including changes to the scope of the AR regime, enhancing the role of the FCA, making changes to place more regulatory obligations on ARs and extending the ability of the Financial Ombudsman Service to investigate complaints involving the activity of ARs;
- provides details of how to respond by the closing date of 3rd March 2022, including by e-mail to appointedreps@hmtreasury.gov.uk.
Next actions
None – for information and awareness