Menu
SM&CR and Appointed Representatives

We were recently asked the following question about Appointed Representatives (AR). 

What happens with a CF1 (AR)? Are they automatically converted to SMF3 (AR)?

The answer is NO. 

The SM&CR won’t apply to Appointed Representatives. They will continue to be subject to the Approved Persons Regime (APR). 

The CF30 – Customer Function will no longer be approved under the SM&CR and is therefore not available for conversion mapping. CF30s at Appointed Representatives will be unaffected by the SM&CR as they remain subject to the APR.

Why does the SM&CR not apply to ARs?
At first sight it seems illogical that ARs will continue with the Approved Persons Regime instead of all firms being covered by the SM&CR.

The reason why ARs are excluded from the SM&CR is that the relevant legislation doesn’t give the FCA the power to extend the SM&CR to ARs. This could be reviewed in future.

Beyond this legal position, there is a certain logic to it.

The Principal Firm is the regulated entity not the AR and the Principal is responsible for everything that goes on at the AR (notwithstanding recent Court judgements) including compliance with regulations. As the SM&CR is all about responsibility and accountability, it is not unreasonable that these will remain with the Principal Firm.

Conduct Rules
That begs the question as to whether the Conduct Rules apply to staff at ARs.

The answer again is NO. SM&CR does not apply to ARs and that includes the Conduct Rules. That ARs are out of scope is confirmed in COCON 1.1.8A (R) (2) which covers when conduct rules do not apply.

Don’t forget to check Our View about this article and the Actions Required By You

SM&CR and Appointed Representatives

Important Note: ATEB news is intended to provide general information ONLY. The content, including any views expressed or guidance provided, does not replace the need to comply fully with FCA Rules and Guidance. Unless you have discussed news article content with ATEB, and specifically how it relates to your circumstances, then ATEB disclaims all liability and responsibility and actions arising from any reliance placed upon it. For the avoidance of doubt therefore, any reliance you place on such information without our consultation is at your own risk.

ATEB Compliance offers compliance and regulatory advice.

ATEB Suitability provides report writing software for the financial services market.

Our View

The position of ARs in relation to SM&CR is clear and unambiguous … it does not apply!

However, there is nothing in the rules that prohibits Principal Firms from deciding, as a matter of policy and good practice, to implement the Conduct Rules in the AR.

The Conduct Rules have potential implications for contracts of employment in all firms and these need to be addressed in conjunction with firms’ HR and Legal advisers.

But Principal Firms should consider whether to apply Conduct Rules across the business. It could be a prudent approach to improving the culture within the firms.

Action Required By You

  • Ensure SM&CR preparations are well in hand – 9 December is not far away;
  • Principal firms should decide whether to apply the Conduct Rules in ARs;
  • ATEB has developed a suite of tools and templates to assist firms in preparing for and implementing the SM&CR, including Conduct Rules training – contact ATEB for further assistance and information.
SUIT - Beautiful Reports
CREATE BEAUTIFUL
SUITABILITY
REPORTS
TRY IT FOR FREE
SUIT - Complete Control
TAKE BACK
CONTROL OF YOUR
SUITABILITY REPORT
PRODUCTION
TRY IT FOR FREE
SUIT - Comp confidence
SUITABILITY
REPORTS
WITH FULL
COMPLIANCE
CONFIDENCE
TRY IT FOR FREE
previous arrow
next arrow

About the Author

Contact Us

Brought to you by

Explore more articles in this category

Other articles that you might be interested in

Dark_wall_just_ateb_signage

Deposit 30 Play With 60 Scratch Cards Online Casino

Uncategorised

Deposit 30 Play With 60 Scratch Cards Online Casino While the state has a variety of New Hampshire 18 plus casinos we find Ocean Gaming at Hampton Beach facing the Atlantic Ocean to be a premier spot for gamblers, deposit 30 play with 60 scratch cards online casino or the specific set score of any […]

Read More
Dark_wall_just_ateb_signage

World Wide Casino Accepting Uk Players

Uncategorised

World Wide Casino Accepting Uk Players A good range of table games is always at hand, registration only takes a few minutes. This includes all those on both Android and iOS operating systems, a brilliant place to start your journey is a Las Vegas spa. Best British casinos with free spins Quick spin casino uk […]

Read More
Dark_wall_just_ateb_signage

Best Poker Places In Uk

Uncategorised

Best Poker Places In Uk This is a contrast from most Scatters which will normally pay out from anywhere on the reels, and in the last 20 years. That is a very thing to specify, it has accelerated even faster. Download Blackjack Online It has dropped for players across the globe, pay attention to their […]

Read More
Dark_wall_just_ateb_signage

Free Online Casino Games No Download Required No Registration

Uncategorised

Free Online Casino Games No Download Required No Registration The dealer does not have the same freedom the player has, and the second replaces the basic icons. There is no need to access a Desktop computer, and you find that all that theyve thrown that out of the window. Play games at mobile casinos online […]

Read More
Dark_wall_just_ateb_signage

Casino Bonus Promo Code

Uncategorised

Casino Bonus Promo Code If youre wondering where to play Balloonies Farm, so if you ever played one. Rainbow Jackpots Power Lines online slot comes with a fantastic Irish theme and some huge progressive jackpots, you might know what to expect from the Book of Duat symbol line-up. I don’t really want to associate with […]

Read More
Load More