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Treasury Select Committee: Appointed Representatives

Oct 8, 2021 | Other

Link(s):https://committees.parliament.uk/publications/7430/documents/77733/default/

Context

The Treasury Select Committee has published responses from HM Treasury (HMT), Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) into its report on Lessons from Greensill Capital. One of the areas covered was potential reform of the Appointed Representatives regime as the only part of Greensill that was regulated was an AR of the principal firm, Mirabella Advisers. We have included below comments from the responses of both HMT and the FCA.

Key points to note

  • HMT has noted that it welcomes the recommendations to consider reforms into the Appointed Representative (AR) Regime. They have stated that “strong and effective oversight of Appointed Representatives is essential for safe operation of the regime”.
  • The Treasury has begun undertaking the work to review the regime and will consider legislative reforms which could be necessary to strengthen the oversight of ARs. There are further plans to issue a Call for Evidence on the overall aim, scope, benefits and risks of the current AR regime.
  • They will be working closely with the FCA on this.
  • The FCA also welcomes the recommendations to consider reforms. They highlighted that the use of the AR regime is a high priority for them and noted their 2021/22 Business Plan in which they highlighted the importance of tackling the harms associated with the regime. They have also mentioned their focus in recent years upon the regime which is included in their 2019/20 Perimeter Report.
  • The FCA will be requesting data in the coming weeks from a number of principal firms which will require them to provide further information on their ARs.
  • The FCA’s investigation into the oversight of the principal firm in this case (Mirabella) is ongoing.

Next actions

Whilst we have included this item for information and awareness, we believe from the responses that there will be some changes to the current AR regime going forward. We will provide more information on this when it becomes available. In the meantime, we suggest firms ensure they have all appropriate policies and procedures in place to enable them to have the robust oversight over their ARs.