Regulation  

FCA cuts AR notification time in half to 30 days

FCA cuts AR notification time in half to 30 days

The Financial Conduct Authority has said it is reducing the pre-notification period for new appointed representative appointments from 60 days to 30 days.

In its consultation paper published back in December, the regulator proposed firms would be required to notify the FCA of future AR appointments 60 days before the appointment takes effect.

However, as part of updated rules in a policy statement published today (August 3), the FCA said almost all respondents agreed with the proposal to require pre‑notification of AR appointments but some considered a 60-day advance notice to be too long and argued it might create business disruption. 

A small number said this might make switching principals harder for ARs and as a result negatively affect competition between networks, which might then negatively affect consumers.

“To avoid business disruption as far as possible, and reflecting consultation feedback, we have decided to require a shorter pre‑notification period of 30 calendar days before an appointment takes effect,” the FCA said. 

“30 days would give us enough time to conduct an initial assessment of an AR appointment, where needed, and consider whether any further action is needed. We also confirm that where the appointment of the AR involves an approved persons process, the 30 days pre-notification period is not in addition to the existing three-month period for determination of approved persons applications.”

The City watchdog said the pre-notification rule would mean that the earliest an AR can begin operating is 30 calendar days following the appointment notification. 

In relation to introducer ARs, the FCA has decided to require the same 30 calendar days notification period as for ‘full’ ARs. 

“Although the scope of regulated activities IARs are permitted to undertake is limited, we still see harm associated with IARs, and may wish to conduct checks where appropriate,” it said.

Verifying AR details 

The FCA proposed to require principals to annually verify the details of their ARs as they appear on the register.

But a few respondents to the proposal said this is unnecessary since principals are already required to report any changes under current rules. 

Some of these also mentioned, in this context, a previous reporting requirement was removed, and queried why it should now be re‑instated. 

The FCA said there was strong support for this proposal and it is proceeding with it as consulted on. 

“While principals are required to keep the details of their ARs up to date at all times and notify us of changes, not all of them do so and changes can be missed,” it said.

The FCA argued it is very important that the data principals have provided on their ARs are accurate and up to date, and that the information presented on the register provides an accurate overview of a firm’s ARs. 

“Principals will be required, once a year, to confirm that the details on their ARs as these appear on the FS Register are correct,” it said.