PERG 4.12 Appointed representatives

Section 39 of the Act makes provision exempting appointed representatives from the need to obtain authorisation. An appointed representative is a person who is a party to a contract with an authorised person which permits or requires the appointed representative to carry on certain regulated activities. SUP 12 (Appointed representatives) contains guidance relating to appointed representatives.

A person who is an authorised person cannot be an appointed representative (see section 39(1) of the Act (Exemption of appointed representatives)).

An appointed representative can carry on only those regulated activities which are specified in the Appointed Representatives Regulations. As respects regulated mortgage contracts, these are arranging (bringing about), making arrangements with a view to and advising on regulated mortgage contracts (as well as agreeing to do so).

A person who is not already an appointed representative for designated investment business activities, and who may wish to become one in relation to the regulated activities of arranging (bringing about), making arrangements with a view to or advising on regulated mortgage contracts, can do so. He must be appointed under a written contract by an authorised person, who has permission to carry on those regulated activities, and who accepts responsibility for the appointed representative's actions when acting for him. SUP 12.4 (What must a firm do when it appoints an appointed representative?) and SUP 12.5 (Contracts: required terms) set out the detailed requirements that must be met for an appointment to be made.

Where a person is already an appointed representative (in relation to any non-mortgage activities) and he proposes to carry on any regulated mortgage activities, he will need to consider the following matters.

1. (1)

   He must become authorised if his proposed mortgage activities include either entering into a regulated mortgage contract or administering a regulated mortgage contract. These activities may not be carried on by appointed representatives and the Act does not permit any person to be exempt for some activities and authorised for others. Once authorised, the person may only carry on the regulated activities that are covered by his permission. He will therefore need to apply for a permission to cover all the regulated activities that he proposes to carry on.

2. (2)

   If he proposes to carry on the regulated activities of arranging (bringing about), making arrangements with a view to or advising on regulated mortgage contracts, he may be able to do so as an appointed representative. But this will depend on a number of issues.

   1. (a)

      He will need to be appointed by an authorised person who is prepared to accept responsibility for the appointed representative's regulated mortgage activities when acting for him. The authorised person must have permission to carry on these regulated mortgage activities.

   2. (b)

      If these regulated mortgage activities are to be carried on for the same authorised person who has already appointed him for his non-mortgage regulated activities, the contract between them will need to be amended to reflect the additional activities. Other amendments to the contract may be required.

   3. (c)

      It may be that these regulated mortgage activities are to be carried on for a different person.

   4. (d)

      If the regulated mortgage activities relating to arranging are to be limited to making introductions, he may be able to operate within the exclusion for introducers described at PERG 4.5.10 G. This is different from the exclusions for introductions relating to securities and contractually based investments, which are described at PERG 8.33.