Part III Authorisation and Exemption

Exemption

39 Exemption of appointed representatives.

(1)

If a person (other than an authorised person)—

(a)

is a party to a contract with an authorised person (“his principal”) which—

(i)

permits or requires him to carry on business of a prescribed description, and

(ii)

complies with such requirements as may be prescribed, and

(b)

is someone for whose activities in carrying on the whole or part of that business his principal has accepted responsibility in writing,

he is exempt from the general prohibition in relation to any regulated activity comprised in the carrying on of that business for which his principal has accepted responsibility.

F1(1ZA)

But a person is not exempt as a result of subsection (1) if subsection (1A) F2, (1AA) or (1BA) applies to the person.

F3(1A)

F4This subsection applies to a person —

(a)

if his principal is an investment firm F5, a F6qualifying credit institution, or F7a firm which has a Part 4A permission to carry on regulated activities as an exempt investment firm within the meaning of regulation 8 of the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), and

(b)

so far as the business for which his principal has accepted responsibility is investment services business,

unless he is entered on the applicable register.

F8(1AA)

This subsection applies to a person—

(a)

if the person’s principal is an investment firm F9, a F10qualifying credit institution, or a person mentioned in Article 3.1 (optional exemptions) of the markets in financial instruments directive, and

(b)

so far as the business for which the person’s principal has accepted responsibility is selling, or advising clients on, structured deposits F11...,

unless the person is entered on the applicable register.

(1B)

F12In subsections (1A) and (1AA) The “applicable register” is F13the record maintained by the FCA by virtue of section 347(1)(ha).

F14(1BA)

This subsection applies to a person (“A”)—

(a)

if A’s principal is a mortgage intermediary, and

(b)

so far as the business for which A’s principal has accepted responsibility is of a kind F15that—

(i)

F16is specified in article 25A (arranging regulated mortgage contracts), article 36A (credit broking), article 53A (advising on regulated mortgage contracts) or article 53DA (advising on regulated credit agreements the purpose of which is to acquire land) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001; and

F17(ii)

relates to mortgage agreements entered into on or after 21st March 2016,

unless A meets the requirements of subsection (1BB).

(1BB)

The requirements of this subsection are—

(a)

that A is entered on the record maintained by the FCA by virtue of section 347(1)(hb);

(b)

that A’s principal is a person who has a Part 4A permission to carry on one or more of the regulated activities mentioned in subsection (1BA)(b)(i); and

(c)

that A’s principal is not a tied mortgage intermediary.

F18(1C)

Subsection (1D) applies where an authorised person (“A”)—

(a)

has permission under Part 4A, or permission resulting from any other provision of this Act, only in relation to one or more qualifying activities,

(b)

is a party to a contract with another authorised person (A's “principal”) which—

(i)

permits or requires A to carry on business of a prescribed description (“the relevant business”), and

(ii)

complies with such requirements as may be prescribed, and

(c)

is someone for whose activities in carrying on the whole or part of the relevant business A's principal has accepted responsibility in writing.

(1D)

Sections 20(1) and (1A) and 23(1A) do not apply in relation to the carrying on by A of a relevant additional activity.

(1E)

In subsections (1C) and (1D)—

(a)

“qualifying activity” means a regulated activity which is of a prescribed kind and relates—

(i)

to rights under a contract of the kind mentioned in paragraph 23 of Schedule 2, other than one under which the obligation of the borrower to repay is secured on land, or

(ii)

to rights under a contract of the kind mentioned in paragraph 23B of that Schedule;

(b)

“relevant additional activity” means a regulated activity which—

(i)

is not one to which A's permission relates, and

(ii)

is comprised in the carrying on of the business for which A's principal has accepted responsibility.

F19(2)

In this Act “appointed representative” means—

(a)

a person who is exempt as a result of subsection (1), or

(b)

a person carrying on a regulated activity in circumstances where, as a result of subsection (1D), sections 20(1) and (1A) and 23(1A) do not apply.

(3)

The principal of an appointed representative is responsible, to the same extent as if he had expressly permitted it, for anything done or omitted by the representative in carrying on the business for which he has accepted responsibility.

F20(4)

In determining whether an authorised person has complied with—

(a)

a provision contained in or made under this Act, F21...

F22(aa)

a provision contained in or made under the Securitisation Regulations 2024, or

(b)

a F23qualifying provision that is specified, or of a description specified, for the purposes of this subsection by the Treasury by order,

anything which a relevant person has done or omitted as respects business for which the authorised person has accepted responsibility is to be treated as having been done or omitted by the authorised person.

(5)

“Relevant person” means a person who at the material time is or was an appointed representative by virtue of being a party to a contract with the authorised person.

(6)

Nothing in subsection (4) is to cause the knowledge or intentions of an appointed representative to be attributed to his principal for the purpose of determining whether the principal has committed an offence, unless in all the circumstances it is reasonable for them to be attributed to him.

F24(7)

A person carries on “investment services business” if, under the full and unconditional responsibility of only one investment firm on whose behalf the person acts, the person—

(a)

promotes investment services or ancillary services to the firm's clients or prospective clients,

(b)

receives and transmits instructions or orders from clients in respect of investment services or financial instruments,

(c)

places financial instruments, or

(d)

provides advice to clients or prospective clients in respect of investment services or financial instruments.

F25(8)

In this section—

“ancillary services” means any of the services and activities listed in Part 3A of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544);

“financial instruments” means those instruments specified in Part 1 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;

“investment services” means any of the services and activities listed in Part 3 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, relating to any of the instruments listed in Part 1 of that Schedule;

“structured deposit” has the meaning given by Article 2.1.23 of the markets in financial instruments regulation.