ZYC-AR-001 – Appointed Representative (AR) Oversight Policy
This policy sets out how Zeyro supervises any Appointed Representatives (ARs) we appoint under our Principal permissions. It covers onboarding, monitoring, file reviews, desk-based oversight, notifications, and termination.
Zeyro’s objective is to ensure ARs act compliantly, deliver fair outcomes, and operate within the scope of their appointment.
1. Purpose
To demonstrate that Zeyro, acting as a Principal firm, maintains effective and proportionate oversight of its Appointed Representatives in line with the FCA’s enhanced AR regime and UK MiFID rules as implemented in the UK.
This policy ensures:
ARs act within their permitted activities.
ARs remain fit, proper, and financially stable.
Risks associated with AR activities are identified and managed.
Zeyro can evidence effective supervision at all times.
2. Scope
Applies to:
All Appointed Representatives appointed by Zeyro under a written AR agreement.
All activities carried out by ARs within the scope of permission delegated by Zeyro.
All Zeyro staff involved in onboarding, monitoring, or supervising ARs.
Does not apply to Introducer Appointed Representatives (IARs). Zeyro will not appoint IARs unless this policy is updated.
3. Governance
SMF16/SMF17 (MLRO & Compliance Oversight) is responsible for AR oversight.
The Board receives quarterly AR oversight reporting and approves any new AR appointments.
Operational Oversight Lead (delegated by SMF16) conducts day-to-day monitoring activity.
Zeyro remains fully responsible to the FCA for all regulatory obligations conducted by its ARs.
4. AR Onboarding Requirements
4.1 Due diligence
Before appointment, Zeyro must complete proportionate but robust due-diligence including:
Identification & background checks on the AR and key individuals.
Financial stability assessment, including accounts and credit checks.
Business model & activity analysis, confirming activities are within scope.
Fitness & propriety assessments for relevant AR personnel.
Compliance culture assessment, including governance, training, and control environment.
Conflicts of interest assessment.
All due diligence is recorded in SharePoint and summarised in the AR Due Diligence Register (Jira).
4.2 FCA notifications
Zeyro completes:
Section 39A AR notification to the FCA.
“Reason we have adequate controls” declaration.
Submission of required RegData information.
ARs may not commence activities until the FCA confirms approval.
4.3 Contracts
Zeyro enters into a written AR Agreement covering:
Scope of permissions
Systems & controls requirements
Reporting & disclosure expectations
Record-keeping
Termination triggers
Rights of audit and access
Requirement for AR to cooperate fully with Zeyro and FCA
5. Ongoing Oversight & Monitoring
Zeyro applies proportionate and risk-based monitoring aligned to the AR’s business type.
5.1 Desk-Based Reviews
Conducted quarterly and recorded in Jira.
Includes:
Review of AR MI
Review of client onboarding & AML process
Review of complaints log
Review of financial promotions
Review of conflicts, gifts and breaches
Review of training & competence logs
Review of any outsourcing arrangements
Review of insurance cover (if relevant)
Assessment of financial health (revenue, solvency signals)
Findings are logged as “Desk-Based Review – AR Name” in the Registers project.
5.2 File Audits
Performed semi-annually (or more frequently for higher-risk ARs).
Typical file sample:
5–10% of relevant transactions, or
at least 3 files per review period.
Checks include:
Advice or arranging documentation (where relevant)
AML/KYC documentation
Appropriateness assessments
Conflict disclosures
Evidence of fair, clear, not misleading communications
Records of client classification (if relevant)
Results are documented in SharePoint and summarised in Jira.
5.3 Promotion Oversight
If the AR issues financial promotions:
All promotions are submitted to Zeyro for approval prior to publication.
Zeyro monitors promotions weekly on public channels.
MirrorWeb website scans catch unapproved promotional changes.
Non-compliant promotions result in immediate escalation and potential withdrawal of AR approval.
5.4 Business Model Monitoring
Zeyro monitors changes that may alter the AR’s risk profile:
New products or services
New jurisdictions
Significant client changes
Changes to ownership or senior management
Outsourcing changes
Material complaints or incidents
ARs must notify Zeyro in advance of material changes.
5.5 Annual AR Review
Once per year SMF16 produces a written assessment including:
Performance against contractual obligations
Training & competence adequacy
Financial stability assessment
Conduct risk indicators
Complaints & breach trends
Whether permissions remain appropriate
Whether Zeyro should continue the appointment
The report is presented to the Board and stored in SharePoint.
6. Record-Keeping
Zeyro records all AR activity, including:
Due diligence
AR contracts
Monitoring reports
File audit findings
Training records
Breaches and complaints
Financial promotions logs
Board oversight
All documents are stored in SharePoint – AR Oversight.
7. Escalation Processes
7.1 Routine issues
Handled via:
Corrective action plan
Additional monitoring
Targeted training
Increased frequency of file reviews
7.2 Serious issues
SMF16 escalates to the Board if:
Evidence of regulatory breach
Unapproved financial promotions
AML/CTF concerns
Failure to provide requested information
Financial instability
Lack of cooperation with oversight
Record maintained in the Breach / Incident Register.
7.3 FCA notification
Zeyro notifies the FCA if:
A significant issue arises with an AR
AR breaches regulatory requirements
Zeyro terminates the AR relationship due to risk
8. Termination of Appointment
Zeyro may terminate an AR relationship where:
There is a material breach of obligations
The AR becomes financially unstable
The AR engages in misconduct
Oversight becomes impractical or disproportionately resource-intensive
Zeyro no longer has confidence in the AR’s systems or governance
On termination:
FCA is notified immediately.
AR must cease regulated activity at once.
All records must be transferred to Zeyro.
9. Review Cycle
This policy is reviewed:
Annually by SMF16, or
Immediately upon any change to FCA AR requirements
Last updated