“…my understanding is that it [the appointed representative regime] was set up in 1986 for self‑employed salespeople. It is now being used for regulatory hosting of companies like Greensill.”
— Sam Woods, Deputy Governor for Prudential Regulation at the Bank of England and CEO of the PRA (UK Parliament, 2021)
On 3 December 2021, the FCA published Consultation Paper CP21/34, followed by Policy Statement PS22/11 in August 2022, to reform the Appointed Representatives (AR) and regulatory hosting landscape, prompted by findings such as the Greensill case and complaints data aggregation.
Offering or using a regulatory hosting solution?
C&G Regulatory Solutions can help you navigate the FCA’s evolving expectations and strengthen your compliance infrastructure. Speak to our experts now.
What Is a Regulatory Hosting Platform?
Regulatory hosting allows firms—typically compliance consultancies—to act as principals by sponsoring Appointed Representatives under their FCA permissions. Hosts typically charge fees while ARs piggy‑back the host’s authorisation. This model remains especially common in sectors such as alternative asset management, offering a lower‑cost route to market.
Why It’s Under FCA Scrutiny
While hosting accelerates market entry, the FCA has flagged four main risk areas:
- UK or third‑country firms using hosting to circumvent full authorisation
- ARs appointed after being denied authorisation
- ARs that surpass their principals in size, posing oversight and capacity risk
- Conflicts of interest via secondment or shifting functions to ARs.
Latest Compliance Rules & Expectations Under PS22/11
Effective 8 December 2022, PS22/11 set out key requirements for principals and hosts:
- Notification: New AR appointments must be notified to the FCA 30 calendar days in advance; existing AR data required via FCA Section 165 request within 60 days.
- Reporting: Principals must submit annual AR complaints and revenue data (regulated + non-regulated), with updates on AR details at least 10 calendar days before changes take effect.
- Hosting notification: Intended or current providers of regulatory hosting must notify the FCA at least 60 calendar days before starting services, or via the Section 165 data collection if ongoing.
- Governance & Systems: Principals must demonstrate adequate systems, controls, resource and senior management oversight comparable to how ARs would be treated if employees.
- Annual Self-Assessment: Principals must conduct a yearly review of AR oversight, resource adequacy and compliance processes, and have board sign off—documented but not filed unless requested.
Practical Steps for Host Principals
| Area | FCA Expectations |
|---|---|
| Notification | Submit Sup 15 Annex 4 for hosting; use Connect or Section 165 request |
| Oversight | Enforce MI reporting, senior reviews, file audits, complaints monitoring |
| AR Size Guardrails | Limit ARs to those within your operational capacity; reassess growth |
| Complaints & Revenue | Report annually within 60 days of AR’s financial year |
| Governance | Capture board-level review, conflicts checks, documented escalation |
| Wind-down preparedness | Maintain protocols to terminate or wind down ARs safely |
Regulatory Hosts & ARs: What’s Changing?
- The FCA’s Business Plan 2025 emphasises data-led interventions, including skilled person reports and targeted supervision of high-risk principal-AR models.
- A fresh report in May 2025 shows AR numbers fell to ≈34,000, with ~2,570 principals—suggesting some entities exited the regime post-reform.
- HM Treasury continues to explore structural reform, including whether principal permissions, extended SM&CR, or FOS coverage should apply to ARs.
Advisory Services for Regulatory Hosting
Compliance with PS22/11 is non-negotiable for host principals. C&G Regulatory Solutions offers tailored advisory services to help your firm:
- Design governance frameworks for AR oversight
- Implement complaints and revenue reporting protocols
- Conduct risk assessments of AR exposures and conflicts
- Prepare notification packages and self-assessment documents
Contact us to discuss regulatory hosting strategies to help ensure your firm meets FCA expectations and avoids supervisory escalation.
Final Thoughts
Regulatory hosting delivers speed to market but comes with heightened FCA scrutiny post‑PS22/11. Hosts must embed robust oversight, meet reporting obligations, and maintain corporate governance. C&G’s advisory capability ensures principals and ARs strengthen their compliance posture with confidence.
