Read information for principal firms operating as regulatory hosts.
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A ‘regulatory host’ is a principal firm that typically carries out little or no regulated activity. Instead, it oversees the use of its permissions by Appointed Representatives (ARs). This service is commonly marketed as an additional service alongside other compliance support services.
Regulatory host firms can oversee a wide variety of AR business models and may not share common commercial objectives with their ARs.
Harm caused by regulatory hosts
Regulatory hosts receive more complaints and create more FCA supervisory cases on average than other principals. Chapter 4 of our policy statement has more information on the harms associated with the regulatory hosting model as well as setting out new, higher, standards for AR oversight.
Responsibilities for regulatory hosts
You must tell us in advance if you intend to start operating as a regulatory host by completing a ‘Sup 15, Annex 4' notification form through Connect. You must also take steps to ensure you will be able to meet our standards, including:
Read more about your responsibilities as a principal firm.
Our action on regulatory hosts
We continue to scrutinise principal firms to ensure the regulatory hosting model operates well. We’ve written to principal firms to clarify our expectations, intervened where we’ve uncovered harm, and refused authorisation where firms haven’t met our requirements. We will continue to be assertive at the gateway and in our supervision to ensure the regulatory hosting model is fit for purpose and principals operating it comply with our rules.