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Investment & regulatory hosting

Host ARs with oversight you can show

For regulatory hosts, host AIFMs and investment principals whose ARs are advisers, arrangers and sponsors working under their permissions.

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The model the 2022 rules were written for

The FCA's case for tightening the regime rested on harm at principals, and hosting was a central concern: limited resource, little knowledge of the markets ARs work in, and reliance on AR fees.

investment management ARs in March 2026
1,055
regulated revenue through those ARs in 2025
£1.9bn
of FSCS claims by value came from principals and ARs, 2018 to mid-2019
61%

The rules that matter in this sector

Sixty days' notice to host
A firm must tell the FCA at least 60 days before it starts offering hosting services, on top of the 30-day notice for each AR (SUP 12.7.9AR).
What an investment AR cannot do
An AR can arrange and advise, but cannot manage investments, act as an AIFM or deal as principal. In the host AIFM model, portfolio management is done by AR staff seconded into the AIFM (SUP 12.2.7).
One principal for retail business
An AR doing designated investment business with retail clients may have only one principal for it, and a tied agent may act for only one MiFID firm (SUP 12.5.6AR).
Approving your ARs' promotions
The financial promotions gateway does not apply to a firm approving its own ARs' promotions for the activities it has accepted, but the principal stays responsible for them.
Capital and conflicts
Principals should reflect the risks their ARs pose in their capital and liquidity, and manage the conflicts that come from depending on AR fees (SYSC 10).

What the FCA has said recently

  1. 21 April 2026

    FCA review of inactive ARs

    Using two years of REP025 data it found misreported revenue, blanket “not trading” explanations, an AR website claiming to be “FCA authorised”, and suspensions with no documented reason or FCA notification.

  2. 12 February 2026

    HM Treasury consults on the AR regime

    Proposals include an FCA permission to act as a principal, Ombudsman jurisdiction over ARs and bringing ARs into SM&CR. No response had been published by October 2026.

  3. 20 October 2025

    Financial crime survey of corporate finance firms

    29% of principals had not carried out financial crime risk assessments for their ARs.

  4. 6 September 2024

    FCA review of principals embedding the 2022 rules

    Only 52% of the self-assessments and 43% of the annual reviews it examined were of good quality, and fewer than a third of principals checked ARs' consumer-facing materials.

  5. 25 March 2024

    Host AIFM findings

    Weak oversight of secondees, little AIFM involvement in investor due diligence, capital that ignored the number of ARs, and ARs holding themselves out as the manager.

Between annual reviews

An AR works outside its scope
Each firm's permitted activities are on its record, and activity outside them is an issue type of its own.
Monitoring & issues
Growth outruns your resources
Risk scores combine each firm's size, complaints and findings, so you can see where the network is growing and where the risk sits.
Risk & completeness
The self-assessment needs evidence
Each AR's annual and triggered reviews are recorded over a frozen snapshot, ready to feed the governing body's sign-off.
Reviews & approvals

What to collect from each AR

Merrin schedules these as returns, by risk tier, and puts each one with the firm or Individual who needs to provide it.

Returns & tasks
  • Revenue split into regulated, non-regulated financial and non-financial
  • Complaints for REP025
  • Deals arranged, mandates and funds advised, to test against scope
  • Client categorisation, with retail clients flagged
  • Financial promotions for approval, and a register of websites and social accounts
  • The AR’s financial crime risk assessment and investor due diligence files
  • For host AIFMs: the secondee register and the funds each AR works on
  • Declared conflicts, and the business plan and target market
  • Fit and proper declarations, solvency and financial statements

Where Merrin fits

Merrin gives a host one record per AR: its scope, people, returns, risk, issues and reviews, so the governing body’s self-assessment rests on evidence rather than attestations.

Keep your existing systems

Portfolio management, fund administration, dealing and investor onboarding stay with your existing systems. Merrin does not hold client money or assets.

Promotion reviews and financial crime modules are planned work. Investment-specific returns need to be confirmed before rollout.

See the roadmap

Consumer credit is our initial focus. Talk to us about the fit for a hosting business.

Questions from investment & regulatory hosting principals

  • What counts as a regulatory host?
    A firm that offers, for remuneration with a view to profit, a service through which unauthorised firms become its ARs, where it either carries on no regulated activity except through its ARs or its ARs' activities are unconnected to its own. It must tell the FCA at least 60 days before it starts (SUP 12.7.9AR).
  • Can our AR manage a fund or a client portfolio?
    No. Managing investments and managing an AIF are not activities an AR can be exempt for. In the host AIFM model, portfolio management is done by the AR's staff seconded into the authorised AIFM, which the FCA expects to supervise them and to stop the AR holding itself out as the manager.
  • What must our annual self-assessment contain, and who signs it?
    The governing body must review and approve it at least every 12 months (SUP 12.6A.6R). It records how the firm complies with SUP 12, the material deficiencies and the steps agreed to fix them, and concerns from the latest AR reviews. It is kept for six years.
  • Do we need gateway permission to approve our ARs’ promotions?
    No. The gateway that took effect on 7 February 2024 does not affect a firm approving its ARs' promotions for the activities it has accepted responsibility for. The principal is still responsible for them being compliant.
  • Is the AR regime about to change?
    HM Treasury consulted in February 2026 on requiring FCA permission to act as a principal (existing principals would be treated as holding it), giving the Financial Ombudsman jurisdiction over ARs where the principal is not responsible, and bringing ARs into SM&CR. The consultation closed on 9 April 2026. As of October 2026 the government is analysing the feedback and no response or timetable has been published.

Sources

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

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