Mandatory Data Request Issued to Principal Firms

The new rules strengthening expectations and requiring principal firms to take more responsibility for the governance of their Appointed Representatives (ARs), came into force on the 8 December.

Under the new rules, principal firms must:

• Apply enhance oversight of their AR’s, ensuring they have adequate systems, expertise, controls, and resources
• Assess and monitor the risk their AR’s pose to consumers and markets
• Annually review their ARs’ activities, business, and senior management
• Be clear on the circumstances when they should terminate an AR relationship

The new rules also call for principals to provide the FCA with more information about their ARs.

In keeping with this, between 8 and 12 December 2022, all principal firms should have received a Section 165 data request from the regulator*, which must be completed by 28 February 2023.

This is a mandatory submission that applies to any AR/IAR that was permitted to conduct regulated activity using a principal firm's permissions, on 8 December 2022. Failure to provide the required information may result in enforcement action.

Under the request, principal firms must provide the FCA with the following information about their ARs and IARs:

• the reasons for any appointments
• the nature of their regulated business
• whether any unregulated business is conducted and, if so, the nature of this business
• anticipated revenue
• the nature of financial arrangements between you, as the principal, and your AR(s)
• complaints information and whether the AR is part of a group

Firms must also provide information about their AR’s and IARS on an annual basis, when a new AR is recruited, or if the activities of an existing AR change.

If you would like more information about this, please contact your Compliance Consultant or get in touch via email at helpdesk@rwagroup.co.uk or call 01604 709509.

*If you are a principal firm and have not received this data request, the FCA suggest:

• checking your spam/junk folder
• checking that your Principal User details on Connect are up to date
• emailing firm.queries@fca.org.uk