On 12 February 2026, HM Treasury (HMT) published a consultation in relation proposed changes to the Appointed Representatives (AR) regime.

Background

On 11 August 2025, HMT published a policy statement setting out an approach intended to shore up confidence in the use of ARs and to safeguard the future of the UK’s AR regime. The policy statement included an initial explanation of proposals intended to achieve this and this consultation sets out more detail on the proposed changes and seeks the views of stakeholders.

Summary

HMT explains that it wants to ensure safe operation of the AR regime and therefore intends to adapt the legislative framework for ARs to provide a proportionate level of protection for consumers of AR firms, while ensuring that the current broad scope of the AR regime is preserved.

Targeted reforms to the legislative framework proposed in this consultation include:

  • Introduction of a Principal permission: Authorised firms wishing to act as Principal for ARs will need to first obtain permission from the Financial Conduct Authority (FCA) to enable the FCA to ensure authorised firms have appropriate expertise and resource to effectively oversee their ARs. However, existing principal firms will not be required to apply for the new permission but will be deemed to have permission from the FCA and will be able to maintain their existing AR appointments, as well as appoint new ARs as necessary. That said, the FCA will have the ability to vary or withdraw such permission in the future if that proves necessary. In addition, the FCA plans to embed the principal permission in the new firm authorisation process so that there will not be a separate application process for a new firm to follow if the applicant firm seeks permission to act as principal when otherwise seeking authorisation from the FCA.
  • Tied agents: Under the EU’s Markets in Financial Instruments Directive (MiFID), a tied agent is a person or firm under the responsibility of an authorised MiFID investment firm on whose behalf it acts. However, HMT considers that section 39A Financial Services and Markets Act (FSMA) 2000 which implemented the relevant MiFID provisions in relation to tied agents no longer serves a purpose and therefore intends to repeal this provision. This is because for an agent of a UK MiFID investment firm to carry on regulated activity in the UK the agent would need to meet the conditions to act as an AR under section 39 of FSMA 2000 in any event and where a UK MiFID firm or its agent carries on activity in an overseas jurisdiction this would be a matter for the overseas jurisdiction, therefore HMT considers that UK regulation of such activity is unnecessary.
  • Extension of the Financial Ombudsman Service (FOS) jurisdiction to ARs: The government intends to implement a targeted extension of the FOS compulsory jurisdiction to ensure that all consumers of regulated financial services, whether dealing with an authorised firm or an AR, have access to the FOS on a consistent basis. As a result, under these proposals, consumers will be able to take a complaint to the FOS if they are unable to resolve a dispute involving an AR where an authorised firm is not responsible for the issue in dispute.
  • Bringing ARs within scope of the Senior Managers and Certification Regime: Rationalising the conduct and fitness & propriety frameworks that apply to ARs so that they are better aligned with the frameworks applying to authorised firms. In particular, the FCA would have the ability to create a new dedicated AR Senior Management Function in principal firms, which would reflect the responsibility that principal firms take on when appointing ARs, with senior management functions within principal firms held to account for overseeing the principal’s ARs.

Next steps

HMT has asked for feedback on this consultation by 9 April 2026.