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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.
What happens if I leave the firm/stop acting for them during the interim permission period?

You will need to log on to the interim notification system and enter the contact details of the new individual. You should first inform the new individual that their details will appear on the interim register.

What is an interim permission?

If you are continuing your Consumer Credit services you should either have full permissions or be operating under an interim licence until your required timeframe to apply for full permission arrives. If you do not have an interim licence you should not be carrying out Consumer Credit business and will have to apply for full permission before undertaking any further business. To perform business without a licence is to be operating illegally. An interim permission therefore is simply a way of continuing services until the time comes to apply for full permission.

I use self-employed agents; will the agents need to be licensed in their own right?

This depends on a number of factors, such as the degree of control the principal has over the agent, the degree to which the agent is integrated into the principal’s business and whether the agent deals with the principal’s customers in his own name.

Very broadly, if you appoint an individual as agent, he or she works only for you, you have the required permission from the FCA for the agent's activities, the contract sets out effective measures for you to control the agent, you accept full responsibility for the conduct of the agent and the agent makes clear to customers that it is representing you.

Is an 'interim permission' the same as authorisation?

No. The 'interim permission' regime is a transitional arrangement and firms will be invited to apply for full authorisation from 1st April 2014 onwards. However it is worth bearing in mind the new regulations came into effect from 1st April 2014 no matter which type of licence you hold.

What information appears on the Consumer Credit Interim Register?

Your contact details including the name of the contact entered into the interim permission system, the firm’s address, telephone number and licence categories.

How long will my interim permission last?

Your 'interim permission' will last until you either need to make a change to the type of activity you undertake, or you are required to apply for full authorisation. Firms will be able to apply for full authorisation between October 2014 and April 2016.