What does "principal firm" and "appointed representative" mean? How do I know whether I am a principal or an appointed representative?
In broad terms, an appointed representative is a business which is not authorised, but which has a contract with a firm (called 'the principal') that allows it to carry on certain activities under the permission of the principal.
A business cannot be an appointed representative for a regulated activity if:
- it does not have a contract with a principal firm which allows or requires it to carry on business
- its principal firm has not accepted responsibility in writing for the regulated activity the business undertakes in
- the firm that the business wants to act as its principal only holds an interim permission for the relevant credit activity
- it operates a credit reference agency
- it provides credit (unless the credit is free of interest and any other charges)
- it is authorised for another activity.
However, the exceptions to this are:
- A firm with an interim permission for a credit activity may also be an appointed representative for a FSMA regulated activity that is not covered by its interim permission
- A firm with a limited permission for certain credit activities will be able to be an appointed representative for other regulated activities. e.g. a motor dealer with a limited permission to carry on credit broking can also be an appointed representative insurance intermediary.
Back to FAQs