On 27 June 2024, the Financial Conduct Authority (FCA) published a new webpage setting out information on the challenges and expectations for principal firms with overseas appointed representatives (OARs).

Challenges

The FCA notes that principals may have challenges overseeing and communicating effectively with their OARs due to differences in legal, accounting and regulatory requirements for each jurisdiction; geographical distance; and cultural and language differences.

Expectations

The webpage flags that the FCA expects principal forms to:

  • Carry out monitoring and oversight of OARs that accounts for any extra challenges that may arise.
  • Consider whether customers dealing with an OAR will receive equivalent services, protections and outcomes as those dealing with UK-based appointed representatives (ARs).
  • Ensure that, if equivalent services, protections and outcomes will not be received, customers are given suitable information to alert them to any differences.
  • Establish on reasonable grounds, on a continuing basis, that the activities of their OARs do not result in undue risk of harm to consumers or market integrity.

Further information

The FCA also sets out practical considerations for principals with OARs. Finally, it notes that it is continuing to use data to inform its approach, including whether any targeted supervisory engagement with principals with OARs is needed in future.