UK proposes stricter oversight of appointed representatives

HM Treasury has published a paper suggesting changes to the legislative framework for appointed representatives. Under the proposals, principals would need permission to use appointed representatives and senior individuals at AR firms would need to meet revised accountability rules. Firms have until 9 April 2026 to provide feedback.

HMT's consultation seeks to address the regulatory gaps in the current AR framework. HMT laid out these gaps in an August 2025 policy statement which we covered in a previous blogpost: UK signals changes to appointed representatives regime. 

The latest proposals include:

• Creating a regulatory gateway so that authorised firms wishing to act as a principal will first need to obtain permission from the FCA. This will enable the FCA to ensure they have the expertise, resources and systems necessary to effectively oversee ARs. HMT would like the FCA to deem existing principal firms to have this permission so they can maintain their existing AR appointments and appoint new ARs as necessary.
• Moving contractual requirements into FCA rules.
• Repealing section 39A FSMA regarding tied agents of MiFID firms.
• Extending Financial Ombudsman Service (FOS) jurisdiction to complaints against ARs where the principal is not responsible for the AR.
• Retaining complaints handling as being the responsibility of principal firms.
• Bringing ARs within the scope of the Senior Managers and Certification Regime (SMCR) to replace the approved persons regime. This would include applying the SMCR's general conduct rules to individuals who are ARs or who work at ARs.
• Introducing a new dedicated AR Senior Management Function for principal firms to reflect their responsibility for overseeing ARs.

Next steps

The consultation closes on 9 April 2026. Once the necessary changes have been made to the ARs legislative framework, HMT, FCA and FOS will publish a more detailed plan and timetable for implementation.

Once the final rules have been published, Principals and ARs will need to review their contractual arrangements and procedures to ensure compliance with the revised regime.