News Story

Compliance oversight of appointed representatives

Compliance oversight of appointed representatives
Release Date: 
08/06/2018

The BVRLA Leasing Broker Committee has agreed to amend the Leasing Broker Code of Conduct, to come in effect from 1 January 2019, to ensure that members operating with appointed representatives (ARs) are directly responsible for their ARs compliance with the Code.

Compliance oversight of ARs has been widely discussed by a designated AR working group since the Financial Conduct Authority (FCA) issued its warning that some Principals did not have robust oversight of their ARs last year.

The FCA stated that it wanted to understand the impact of appointed representative arrangements on customers and whether principals had assessed the risks associated with using ARs and put in place robust systems and controls to oversee their activities effectively, particularly their sales activities.

Both the working group and the Committee acknowledged that principal brokers had robust processes to ensure their ARs were compliant, but it was agreed that this would need to be evidenced independently of the broker to help satisfy the oversight obligations funders had to the FCA.

It was agreed that it would not make sense for this to be duplicated by each funder and it would be logical for the BVRLA to look at expanding its inspection programme.

The BVRLA’s appointed inspection partner, CCAS is working with the association to develop a revised inspection programme for those members who operate with ARs and further details of how this programme will be operated and paid for will be published in the Autumn.