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Alice H
Alice H, Solicitor/Partner
Category: Law
Satisfied Customers: 2850
Experience:  Partner in national law firm
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i run websites where i am a introducer to people who are introducers

Customer Question

i run websites where i am a introducer to people who are introducers themselves to financial experts, do i have to register with fca regarding being a introducer, they asked me to seek professional advice
Submitted: 4 years ago.
Category: Law
Expert:  Alice H replied 4 years ago.
Hello and welcome to Just Answer.

My name is Alex and I'm happy to help with your question today.

Do you mean the FSA?

Do you arrange deals, take deposits, management investments or give investment advice?
Customer: replied 4 years ago.


FCA which i believe has replaced FSA, i don't do any of the above you mentioned, they referred me to FCA handbook section 12.2, but wouldn't give me a simple answer, as i merely introduce to introducers who then refer people to experts with various products.I don't believe or i can join fca as a introducer because i don't have any contact with the experts,

Expert:  Alice H replied 4 years ago.
Thanks.

s.19 Financial Services and Marketing Act 2000 places a prohibition on "regulated activity", of the type I have mentioned, unless a person is "authorised or exempt".

Under s.39 FSMA it is possible to become an exempt representative (or "introducer") if there is (i) a contract with an authorised person (“his principal”) which (ii) permits or requires the representative to carry on business of a prescribed description (iii) and the authorised person has accepted responsibility in writing for that representative.

In other words, introducers are exempt persons so long as they have agreements with and are working for an authorised person.

The Handbook to which you refer confirms the position as far as ss.19 and 39 are concerned and states that "...an appointed representative is an exempt person in relation to any regulated activity comprised in the carrying on of the business for which his principal has accepted responsibility..."

Moreover, an introducer must disclose their status, they must not handle client money and they must disclose their fees/payments and who they are acting for.

I can reproduce the relevant part of the handbook should you required.

Alex






Customer: replied 4 years ago.

My website states i am not authorised merely an introducer, BUT as i am introducing clients to introducers, i cannot have agreement with the experts as i don't deal with them, so am i ok to continue?, as i cannot get written authorisation from the experts, and the introducers cannot assist me as they are again merely introducers. Where do i stand withm at present

Expert:  Alice H replied 4 years ago.
OK understand.

If I understand the position you are somebody who introduces clients to an 'appointed representative' who in turn passes the client to an 'authorised person'.

How do you get paid and by whom? What do you do with clients when they contact you?


Customer: replied 4 years ago.

I just send spreadsheet with their email, phone number, name etc that's it. I get paid commission by the introducers from there fees they gat from the experts

Expert:  Alice H replied 4 years ago.
Thanks.

The regulations to say that you are exempt if the scope of your work is limited to

(a) effecting introductions; and
(b) distributing non-real time financial promotions

BUT ONLY IF working for an authorised person.

So on the basis that you are in the chain of introducing work you would be caught by the regulations.

To avoid liability you ought to consider becoming a representative for an authorised person or firm.

At the moment you are carrying out the work of a representative but without the statutory safeguards in place.

Alex

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