The Financial Services and Markets Act 2000 (Appointed Representatives) Regulations 2001

Requirements applying to contracts between authorised persons and appointed representatives U.K.

3.—(1)  [F1 It is a prescribed requirement for the purposes of section 39(1)(a)(ii) of the Act that a contract between a principal and a representative] must (unless it prohibits the representative from representing other counterparties) contain a provision enabling the principal to—

(a) impose such a prohibition; or

(b) impose restrictions as to the other counterparties which the representative may represent, or as to the types of investment in relation to which the representative may represent other counterparties.

F2 (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) For the purposes of paragraph (1) a representative is to be treated as representing other counterparties where he—

[F3 (aa) he enters into investment transactions as agent (in circumstances constituting the carrying on of an activity of the kind specified by article 21 of the Regulated Activities Order) for other counterparties;]

(a) makes arrangements (in circumstances constituting the carrying on of an activity of the kind specified by article 25 of [F4 that Order]) for persons to enter (or with a view to persons entering) into investment transactions with other counterparties;

[F5 (ab) he assists in the administration and performance of a contract of insurance (in circumstances constituting the carrying on of an activity of the kind specified by article 39A of that Order) for other counterparties;]

(b) arranges (in circumstances constituting the carrying on of an activity of the kind specified by article 40 of that Order) for other counterparties to safeguard and administer assets; or

(c) gives advice (in circumstances constituting the carrying on of an activity of the kind specified by article [F6 53(1)] of that Order) on the merits of entering into investment transactions with other counterparties;

where an “investment transaction” means a transaction to buy, sell, subscribe for or underwrite an investment which is a security [F7 , a relevant investment or a structured deposit].

[F8 (3) A representative is also to be treated as representing other counterparties for the purposes of paragraph (1) where he—

(a) makes arrangements (in circumstances constituting the carrying on of an activity of the kind specified by article 25A of that Order)—

(i) for persons to enter (or with a view to persons entering) as borrowers into regulated mortgage contracts with other counterparties, or

(ii) for a person to vary a regulated mortgage contract entered into by a person as borrower after the coming into force of article 61 of that Order with other counterparties; F9 ...

(b) gives advice (in circumstances constituting the carrying on of an activity of the kind specified by article 53A of that Order) on the merits of—

(i) persons entering as borrowers into regulated mortgage contracts with other counterparties, or

(ii) persons varying regulated mortgage contracts entered into by them as borrower after the coming into force of article 61 of that Order [F10 with other counterparties; or

(c) gives advice (in circumstances constituting the carrying on of an activity of the kind specified by article 53DA of that Order) which consists of the provision of personal recommendations to a person in respect of one or more transactions with other counterparties.]]

[F11 (3A) A representative is also to be treated as representing other counterparties for the purposes of paragraph (1) where he—

(a) makes arrangements (in circumstances constituting the carrying on of an activity of the kind specified by article 25B of that Order)—

(i) for a person to enter (or with a view to a person entering) as reversion seller or plan provider into a regulated home reversion plan with other counterparties, or

(ii) for a person to vary a regulated home reversion plan entered into on or after 6th April 2007 by him as reversion seller or plan provider with other counterparties; or

(b) gives advice (in circumstances constituting the carrying on of an activity of the kind specified by article 53B of that Order) on the merits of—

(i) a person entering as reversion seller or plan provider into a regulated home reversion plan with other counterparties, or

(ii) a person varying a regulated home reversion plan entered into on or after 6th April 2007 by him as reversion seller or plan provider with other counterparties.

(3B) A representative is also to be treated as representing other counterparties for the purposes of paragraph (1) where he—

(a) makes arrangements (in circumstances constituting the carrying on of an activity of the kind specified by article 25C of that Order)—

(i) for a person to enter (or with a view to a person entering) as home purchaser into a regulated home purchase plan with other counterparties, or

(ii) for a person to vary a regulated home purchase plan entered into on or after 6th April 2007 by a person as home purchaser with other counterparties; or

(b) gives advice (in circumstances constituting the carrying on of an activity of the kind specified by article 53C of that Order) on the merits of—

(i) a person entering as home purchaser into a regulated home purchase plan with other counterparties, or

(ii) a person varying a regulated home purchase plan entered into on or after 6th April 2007 by him as home purchaser with other counterparties.]

[F12 (3C) A representative is also to be treated as representing other counterparties for the purposes of paragraph (1) where the representative effects introductions (in circumstances constituting the carrying on of an activity of the kind specified by article 36A of that Order) of individuals or relevant recipients of credit (within the meaning of that Order) to other counterparties.

[F13 (3CA) A representative is also to be treated as representing other counterparties for the purposes of paragraph (1) where the representative—

(a) facilitates persons becoming the lender and borrower under an article 36H agreement F14 ... on behalf of other counterparties;

[F15 (aa) facilitates a person assuming the rights of the lender under an article 36H agreement by assignment or operation of law on behalf of other counterparties;]

(b) carries on any of the other activities specified in article 36H(3) of that Order on behalf of other counterparties in the course of, or in connection with, facilitation as mentioned in [F16 sub-paragraph (a) or (aa)].]

[F17 (c) gives advice (in circumstances constituting the carrying on of activity of the kind specified by article 53(2) of that Order) on the merits of—

(i) a person entering into a relevant article 36H agreement as a lender or assuming the rights of a lender under such an agreement by assignment or operation of law,

(ii) a person providing instructions to an operator with a view to entering into a relevant article 36H agreement as a lender or assuming the rights of a lender under such an agreement by assignment or operation of law, where the instructions involve—

(aa) accepting particular parameters for the terms of the agreement presented by an operator,

(bb) choosing between options governing the parameters of the terms of the agreement presented by an operator, or

(cc) specifying the parameters of the terms of the agreement by other means,

(iii) a person enforcing or exercising the lender's rights under a relevant article 36H agreement, or

(iv) a person assigning rights under a relevant article 36H agreement,

on behalf of other counterparties.]

[F18 (3CB) In paragraph (3CA)—

“article 36H agreement” has the meaning given by article 36H of the Regulated Activities Order,

“lender” has the meaning given by article 36H of the Regulated Activities Order,

“operator” means a person carrying on an activity of the kind specified by article 36H(1) or (2D), and

“relevant article 36H agreement” means an article 36H agreement which has been, or is to be, entered into with the facilitation of a person carrying on a regulated activity of the kind specified by article 36H(1) or (2D) not in contravention of the general prohibition.]

(3D) A representative is also to be treated as representing other counterparties for the purposes of paragraph (1) where the representative takes steps (in circumstances constituting the carrying on of an activity of the kind specified by article 39D of that Order) on behalf of other counterparties.

(3E) A representative is also to be treated as representing other counterparties for the purposes of paragraph (1) where the representative gives advice to a borrower (in circumstances constituting the carrying on of an activity of the kind specified by article 39E F19 ... of that Order) about the liquidation of a debt due under a credit agreement or consumer hire agreement (in each case, within the meaning of that Order) on behalf of other counterparties.

(3F) A representative is also to be treated as representing other counterparties for the purposes of paragraph (1) where the representative takes steps (in circumstances constituting the carrying on of an activity of the kind specified by article 39F of that Order) to procure the payment of debts on behalf of other counterparties.

(3G) A representative is also to be treated as representing other counterparties for the purposes of paragraph (1) where the representative performs duties (in circumstances constituting the carrying on of an activity of the kind specified by article 39G of that Order) under, or exercises or enforces rights under, an agreement on behalf of other counterparties.

[F20 (3GA) A representative is also to be treated as representing other counterparties for the purposes of paragraph (1) where the representative gives advice (in circumstances constituting the carrying on of an activity of the kind specified by article 53E of that Order) on behalf of other counterparties.]

(3H) A representative is also to be treated as representing other counterparties for the purposes of paragraph (1) where the representative enters into regulated credit agreements or exercises or has the right to exercise the lender's rights and duties under such agreements (in circumstances constituting the carrying on of an activity of the kind specified by article 60B of that Order) on behalf of other counterparties

(3I) A representative is also to be treated as representing other counterparties for the purposes of paragraph (1) where the representative enters into regulated consumer hire agreements or exercises or has the right to exercise the owner's rights and duties under such agreements (in circumstances constituting the carrying on of an activity of the kind specified by article 60N of that Order) on behalf of other counterparties.]

[F21 (3J) A representative is also to be treated as representing other counterparties for the purposes of paragraph (1) where the representative takes steps on behalf of or gives advice to an individual or a relevant recipient of credit in relation to the taking of any steps (in circumstances constituting the carrying on of an activity of the kind specified by article 89A of that Order) on behalf of other counterparties.]

[F22 (4) Where the contract between the principal and the representative permits or requires the representative to carry on business which includes an activity—

(a) of the kind specified by article 21, 25, 39A or 53 of the Regulated Activities Order or an activity of the kind specified by article 64 of that Order, so far as relevant to any of those articles, and

(b) which relates to a contract of insurance,

paragraph (5) applies.

(5) Where this paragraph applies, it is also a prescribed requirement for the purposes of subsection (1)(a)(ii) of section 39 of the Act that the contract between the principal and the representative contain a provision providing that the representative is not permitted or required to carry on business, so far as it comprises an activity of the kind specified by paragraph (4), unless he is included in the record maintained by the [F23 FCA] under section 347 of the Act by virtue of article 93 of the Regulated Activities Order (recorded insurance intermediaries).]

[F24 (6) In the case of a representative to whom section 39(1A) or (1AA) of the Act applies (“R”), it is a prescribed requirement for the purposes of section 39(1)(a)(ii) F25 ... that the contract between the principal and R must—

(a) where section 39(1A) of the Act applies to R, contain a provision that R is only permitted to provide the services and carry on the activities referred to in [F26 Part 3 of Schedule 2 to the Regulated Activities Order] while R is entered on the applicable register; or

(b) where section 39(1AA) of the Act applies to R, contain a provision that R is only permitted to sell, or advise clients on, structured deposits as defined by [F27 Article 2.1.23 of the markets in financial instruments regulation] while R is entered on the applicable register.]

Textual Amendments

F1 Words in reg. 3(1) substituted (31.12.2020) by The Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/632), regs. 1(3), 178(4)(a) (with savings in S.I. 2019/680, reg. 11 (as amended by S.I. 2019/1212, regs. 1(3), 22(3)); 2020 c. 1, Sch. 5 para. 1(1)

F2 Reg. 3(1A) omitted (31.12.2020) by virtue of The Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/632), regs. 1(3), 178(4)(b) (with savings in S.I. 2019/680, reg. 11 (as amended by S.I. 2019/1212, regs. 1(3), 22(3)); 2020 c. 1, Sch. 5 para. 1(1)

F3 Reg. 3(2)(aa) inserted (31.10.2004 for specified purposes, 14.1.2005 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2003 (S.I. 2003/1476), arts. 1(3), 14(4)(a)(i)

F4 Words in reg. 3(2)(a) substituted (31.10.2004 for specified purposes, 14.1.2005 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2003 (S.I. 2003/1476), arts. 1(3), 14(4)(a)(ii)

F5 Reg. 3(2)(ab) inserted (31.10.2004 for specified purposes, 14.1.2005 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2003 (S.I. 2003/1476), arts. 1(3), 14(4)(a)(iii)

F6 Word in reg. 3(2)(c) substituted (17.3.2016 for specified purposes, 6.4.2016 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2016 (S.I. 2016/392), arts. 1(2)(3)(d), 5(2) (with Pt. 5)

F7 Words in reg. 3(2) substituted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 3 para. 3(3)(a) (with reg. 7)

F8 Reg. 3(3) inserted (31.10.2004) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 1) Order 2003 (S.I. 2003/1475), arts. 1(3), 23(4)

F9 Word in reg. 3(3)(a) omitted (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by virtue of The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 7(3)(a) (with Pt. 4)

F10 Reg. 3(3)(c) and words substituted for words (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), art. 1(5), Sch. 1 para. 7(3)(b) (with Pt. 4)

F11 Reg. 3(3A)(3B) inserted (6.11.2006 for specified purposes, 6.4.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2006 (S.I. 2006/2383), arts. 1(2), 31(4)

F12 Reg. 3(3C)-(3I) inserted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (S.I. 2013/1881), arts. 1(2)(6), 15(3)

F13 Reg. 3(3CA) inserted (1.4.2014) by The Financial Services and Markets Act 2000 (Appointed Representatives) (Amendment) Regulations 2014 (S.I. 2014/206), regs. 1, 2(3)

F14 Words in reg. 3(3CA)(a) deleted (17.3.2016 for specified purposes, 6.4.2016 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2016 (S.I. 2016/392), arts. 1(2)(3)(d), 5(3)(a) (with Pt. 5)

F15 Reg. 3(3CA)(aa) inserted (17.3.2016 for specified purposes, 6.4.2016 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2016 (S.I. 2016/392), arts. 1(2)(3)(d), 5(3)(b) (with Pt. 5)

F16 Words in reg. 3(3CA)(b) substituted (17.3.2016 for specified purposes, 6.4.2016 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2016 (S.I. 2016/392), arts. 1(2)(3)(d), 5(3)(c) (with Pt. 5)

F17 Reg. 3(3CA)(c) inserted (17.3.2016 for specified purposes, 6.4.2016 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2016 (S.I. 2016/392), arts. 1(2)(3)(d), 5(3)(d) (with Pt. 5)

F18 Reg. 3(3CB) inserted (17.3.2016 for specified purposes, 6.4.2016 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2016 (S.I. 2016/392), arts. 1(2)(3)(d), 5(4) (with Pt. 5)

F19 Words in reg. 3(3E) omitted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), arts. 1(3)(4), 9(2)(a)

F20 Reg. 3(3GA) inserted (6.7.2016) by Bank of England and Financial Services Act 2016 (c. 14), ss. 34(6), 41(3) (with s. 34(7)); S.I. 2016/627, reg. 2(1)(y)

F21 Reg. 3(3J) inserted (14.2.2014 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014 (S.I. 2014/366), arts. 1(3)(4), 9(2)(b)

F22 Reg. 3(4)(5) inserted (31.10.2004 for specified purposes, 14.1.2005 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2003 (S.I. 2003/1476), arts. 1(3), 14(4)(b)

F23 Word in reg. 3(5) substituted (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 39

F24 Reg. 3(6) substituted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes, 3.1.2018 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 3 para. 3(3)(b) (with reg. 7)

F25 Words in reg. 3(6) omitted (31.12.2020) by virtue of The Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/632), regs. 1(3), 178(4)(c)(i) (with savings in S.I. 2019/680, reg. 11 (as amended by S.I. 2019/1212, regs. 1(3), 22(3)); 2020 c. 1, Sch. 5 para. 1(1)

F26 Words in reg. 3(6)(a) substituted (31.12.2020) by The Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/632), regs. 1(3), 178(4)(c)(ii) (with savings in S.I. 2019/680, reg. 11 (as amended by S.I. 2019/1212, regs. 1(3), 22(3)); 2020 c. 1, Sch. 5 para. 1(1)

F27 Words in reg. 3(6)(b) substituted (31.12.2020) by The Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/632), regs. 1(3), 178(4)(c)(iii) (with savings in S.I. 2019/680, reg. 11 (as amended by S.I. 2019/1212, regs. 1(3), 22(3)); 2020 c. 1, Sch. 5 para. 1(1)

Commencement Information

I1 Reg. 3 in force at 1.12.2001, see reg. 1(1)