While IPs are generally excluded from needing FCA authorisation under Art 72H of the Regulated Activities Order 2001, the authors warn that this exclusion is narrow and fact-specific. Missteps—such as acting outside formal appointment or misunderstanding the scope of regulated activities—can trigger criminal liability under the Financial Services and Markets Act 2000.
The article also highlights the importance of regulator consent when IPs are appointed over FCA-regulated firms, and the need to comply with client asset rules and conduct standards. A recent tribunal decision, Promethean Finance, underscores that exclusions are not blanket permissions.
The message is clear: IPs must tread carefully, seek legal advice when in doubt, and maintain open communication with regulators to avoid regulatory pitfalls.
