FCA Register: How to Check a Firm, Its Permissions and People
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Read the guideLeaving An AR Network · Going Direct
Appointed Representative to Direct FCA Authorisation
If you are currently an Appointed Representative and want to leave your principal or network and become directly authorised, the decision reaches further than a single application. It means scoping your own permissions, building the compliance function your principal has been providing, and planning a handover that protects your clients and your regulatory standing while you make the switch. MEMA supports firms through that process end to end.
The Appointed Representative to Direct Authorisation journey
The route from scoping your permissions to a decision. The FCA's part of it is fixed; the preparation before it is where applications are won or lost.
Map what your principal does for you
Establish which controls you already own and which have been your principal's all along. Firms usually find the gap here rather than at submission.
- Separate what you run from what the principal runs
- Identify the permissions you will need in your own name
- Test honestly whether the firm is ready to stand alone
Rebuild in-house and prepare the application
Everything the principal provided has to exist inside your firm, evidenced, before the application goes in — and the timing of your departure has to be planned around that.
- Stand up governance, compliance oversight and reporting
- Build the plan for a firm operating on its own account
- Sequence the exit so customers are covered throughout
Submit to FCA
Submitted through the FCA's Connect portal with the application fee of £280 – £225,170.
- Complete submission through Connect
- Application fee paid at submission
- Case officer assigned by the FCA
FCA review
The statutory determination period is 6–12 months — six months for a complete application, twelve if it is incomplete when submitted.
- Case officer raises questions on the submission
- Further information requests answered and evidenced
- Weak responses, not complexity, are the common cause of delay
Permission granted
Permission is granted and the firm can carry on the regulated activity, subject to any requirements attached to it.
- Permission recorded on the Financial Services Register
- Any limitations or requirements confirmed
- Reporting and supervision obligations begin
- What applies
- Becoming FCA authorised
- Where it sits in the rules
- Part 4A permission under FSMA
- FCA determination
- 6–12 months
- FCA application fee
- £280 – £225,170
Statutory period from a complete application
No separate AR conversion fee — you pay the category for the permissions you apply for
Where are you in the transition?
Choose the point that best matches your relationship with the principal.
Considering independence
Assess the model, control and commercial case.
Preparing the application
Build permissions, governance and evidence.
Managing dependencies
Plan an orderly exit and continuity.
Already submitted
Coordinate responses and implementation.
Key Appointed Representative to Direct Authorisation Requirements
What the FCA expects, and the evidence behind it.
Operating modelDefine what changes when principal oversight reduces.
PermissionsMap activities and the direct authorisation route.
GovernanceSet senior accountability and independent controls.
TransitionManage continuity, communications and dependencies.
What you will need to produce
- Direct authorisation strategy
- Business plan and permissions map
- Governance and control framework
- Principal exit and continuity plan
Understand what independence changes
The move is broader than replacing a principal agreement with an application.
Accountability
Identify the regulatory, governance and control responsibilities previously supported by the principal.
Permissions and model
Map current activities, proposed scope, customer relationships and direct permissions.
Capability
Assess people, policies, monitoring, financial resources, reporting and senior management.
Plan the handover with continuity in mind
The firm must remain clear about its status while dependencies are moved.
Principal exit
Map contractual, customer, records, notification and service dependencies.
Application build
Use the AR operating record where relevant, while addressing the full direct-application requirements.
Transition controls
Set a controlled sequence for permissions, communications, systems and post-authorisation ownership.
How MEMA helps
Leaving a principal is two projects at once: getting authorised, and replacing everything the principal was doing for you. Both have to land together.
- 01
Test whether direct authorisation is right
An honest assessment of whether the firm has the resource and governance to stand alone, before any application work starts.
- 02
Map what the principal provides
Compliance oversight, permissions, systems and reporting all currently sit somewhere. We identify what has to be rebuilt in-house.
- 03
Build the application
Business plan, permissions and financials prepared for a firm operating on its own account rather than under someone else's umbrella.
- 04
Stand up the governance
Senior-manager arrangements, policies and controls the firm will be assessed on and will have to operate from day one.
- 05
Plan the exit and continuity
Sequencing the departure from the principal so customers, contracts and reporting are covered throughout — the part firms most often leave until last.
What We Do
From the decision to go direct through to a completed, independent authorisation
Application & Evidence Build
- Perimeter and permissions scoping against the RAO and PERG
- Regulatory business plan, financial projections and Threshold Conditions evidence
- SMF appointments, Statements of Responsibilities and fitness & propriety assessments
- A compliance monitoring programme built for independent operation, not inherited from the principal
Principal Exit & Handover
- AR agreement review, including notice periods and client book provisions
- Planning the handover of regulatory responsibilities and client notifications
- Sequencing the exit against your authorisation timeline
- Continuity of service through to a clean regulatory handover
End-to-End Application Management
- FCA case management and liaison through to approval
- Senior Manager interview preparation
- Building the independent compliance function and reporting capability a directly authorised firm needs from day one
- Governance frameworks sized to the firm you are now, not the AR you were
The Regulatory Position
What the AR-to-direct transition actually involves
Section 39, FSMA 2000
The AR Exemption
An appointed representative carries on regulated activities under the regulatory umbrella of an FCA-authorised principal firm, which takes on regulatory responsibility for the AR's activities under section 39 of the Financial Services and Markets Act 2000.
6 to 12 Months
FCA Application Assessment
The FCA's own assessment of a direct authorisation application typically runs 6 to 12 months once submitted. Firms need separate preparation time before they are ready to submit a credible application.
9 to 18 Months
Typical Full Transition
From the point preparation begins to the point the FCA grants authorisation and the firm can operate independently, the typical transition runs 9 to 18 months. The firm continues trading as an AR under its principal throughout.
Over 60%
Of FSCS claims by value involve principals and ARs
The FCA said so on 3 August 2022, confirming stronger oversight rules, and added that principals generate up to 400% more supervisory cases and complaints than other directly authorised firms. Those rules, PS22/11, came into force on 8 December 2022. The scrutiny falls on the principal first — but it is the AR's business that stops if the relationship fails.
Read it on fca.org.uk (opens on the FCA website)Why Firms Make This Move
Direct authorisation trades a lower-cost, faster start for control. For an AR that has outgrown the arrangement, the trade tends to run the other way.
Regulatory control
As an AR, the principal controls the compliance framework, permissions and oversight. Direct authorisation means the firm sets its own compliance arrangements and risk appetite.
Product flexibility
An AR is restricted to activities within its principal's permission scope and appetite. A directly authorised firm has full flexibility within its own permission set.
Brand independence
Some principals require co-branding or impose brand guidelines. Direct authorisation gives the firm complete control over its brand and market positioning.
Exit and dependency
As an AR, contractual notice periods apply and the client book may be subject to the principal's terms. A directly authorised firm has no dependency on a third party for its regulatory status.
The commercial argument usually comes down to the ongoing cost of the principal relationship. An AR paying in the region of 15-25% of revenue to a principal, or a comparable revenue share or oversight fee, is making a significant ongoing transfer. For a firm generating meaningful revenue, that cost can overtake the one-off cost of obtaining and maintaining direct authorisation within roughly twelve to twenty-four months.
The FCA's own charges are the smaller part of that comparison. A direct authorisation application is priced by category rather than by a single fee: most financial advisers, mortgage brokers and general insurance intermediaries fall into Category 4, currently £2,820, and most other firms sit between £560 and £5,640. Once authorised, firms in the 'A' fee-blocks pay a minimum annual periodic fee of £2,200, with more due where the firm's reported income takes it above the minimum. It is the recurring principal share, not the regulator's fee, that usually decides the arithmetic.
Source: FCA, Pricing categories for application fees and FCA fee rate movement 2026/27. Application fee categories and the 2026/27 minimum periodic fee, as at August 2026. The FCA revises both annually.
Case Study
From appointed representative to its own FCA authorisation
As an appointed representative, the firm operated under its principal's permissions and had to run controls that satisfied its principal. It then wanted to be authorised by the FCA directly.
The firm moved from appointed representative status to direct FCA authorisation.
Mistakes We Help Firms Avoid
Patterns we see repeatedly in firms making this transition
Treating the AR route as a permanent arrangement rather than a staging post, until the cumulative principal fees outweigh the one-off cost of independent authorisation
Underestimating the dependency risk in the AR agreement: principals can typically terminate on 30 to 90 days' notice, for any reason or no reason
Assuming AR status means a lighter regulatory burden. SM&CR has applied to ARs since December 2019, and conduct, financial promotion and compliance obligations still apply in full
Leaving the transition planning too late. Building an independent compliance function, reporting capability and governance structure from a standing start takes time, and twelve to eighteen months of lead time is a realistic minimum
Related Services
If you oversee Appointed Representatives rather than operating as one, see our page for principal firms.
Related FCA Guidance
Deeper reading on the AR regime and the route to direct authorisation.
Comparison
AR vs Direct Authorisation
Speed, cost, control, flexibility and exit complexity, compared side by side.
DecisionAR vs Direct Authorisation: Making the Right Choice
Cost trade-offs, control, exit planning, and when each route is the right one.
GuideAppointed Representative Guide
The AR legal framework, AR types, and principal obligations under FSMA s39.
Speak to a specialist
Talk to us about leaving your principal
Whether you have already decided to go direct or are still weighing it up against staying an AR, tell us where you stand and we will come back to you.
0330 133 0811
Prefer to talk it through first? Call and you will speak to a consultant, not a switchboard.
Frequently Asked Questions
Select a question to view the answer.
Can an appointed representative become directly authorised later?
Yes. This is a well-established pathway. Many firms start as an AR to enter the market quickly, then apply for direct authorisation once they have an established business model, a track record, and the resources for independent compliance. The move needs a full FCA authorisation application, and separately, careful planning around the handover of regulatory responsibilities, client notifications, and a clean contractual exit from the principal arrangement. The FCA assesses the application on its own merits, though demonstrable experience as an AR can support the application narrative.
How long does the transition from AR to direct authorisation take?
Typically 9 to 18 months from the point preparation begins to the point the FCA grants authorisation and the firm can operate independently. The FCA's own application assessment usually runs 6 to 12 months; the rest of the time goes on building the compliance function, governance, financial resources, regulatory reporting and Senior Manager approvals a directly authorised firm needs. Throughout preparation, the firm keeps operating as an AR under its principal, and should not start operating as if directly authorised before the FCA has actually granted authorisation.
Why would an AR want to leave a principal that has done nothing wrong?
Principal dependency is a risk in its own right, separate from how well any particular principal performs. If a principal's own authorisation is cancelled, varied or surrendered, its ARs lose the ability to conduct regulated activities immediately and cannot serve clients in a regulated capacity until they find a new principal or obtain their own authorisation. In PS22/11, published on 2 August 2022, the FCA strengthened the rules for principal firms, stating that where harm occurs it is often because principals do not do adequate due diligence before appointing an AR, or because of poor ongoing control and oversight. Those rules came into force on 8 December 2022, and supervisory attention on the AR model has increased since. That scrutiny falls on the principal in the first instance, but it is the AR's business that stops trading if the principal relationship fails.
Does time spent as an AR count for anything in a direct application?
It can help the narrative, though it does not soften the assessment itself. Firms transitioning from AR to direct authorisation should evidence their track record: compliance monitoring results, complaint volumes and outcomes, and how any regulatory issues that arose during the AR period were handled. A clean AR track record strengthens the application; a history of compliance failings, complaints or principal interventions attracts additional FCA scrutiny.