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Glossary

Scope of appointment

The scope of appointment is the set of regulated activities, and any restrictions on them, that the principal has accepted responsibility for in the AR's contract. The AR is exempt only inside that scope. Outside it, the AR is in breach of the general prohibition.

The rules

  • The AR is exempt only for the business its principal has accepted responsibility for (SUP 12.2.2G), and that business must fall within the principal's own permission (SUP 12.4.1AG).
  • The principal must take reasonable steps so the AR stays within scope and keeps that business clearly distinct from its other business, in practice and in how it holds itself out (SUP 12.6.6R).
  • The activities and restrictions are notified on appointment and appear on the Register. A change to the category of activities needs at least ten days' notice (SUP 12.7.7R(4)).
  • An expansion of scope triggers a review (SUP 12.6A.3R), and acting outside scope is an indicator that termination may be appropriate (SUP 12.6.1-AG).

Common misconceptions

“If the principal has the permission, the AR can do it.”
The AR is exempt only for business the principal has accepted in writing.
“Narrowing the scope needs no notice.”
A change to the category of activities needs ten days' notice either way.

In Merrin

Merrin stores each firm's permitted activities, and acting outside them is an issue type of its own.

Monitoring & issues

Sources

Checked against these sources on . This is general information, not legal advice.

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