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Psst! Want to get into P2P? How about being an AR?

As the world of alternative and crowd finance grows in both scale and acceptability, more and more organisations are recognising the relevance that it can have to them and their sector. But seeing the opportunity and being able to access it are often quite different things. Not least because the process of setting up to operate as a P2P platform in a fully-regulated sector can be quite daunting, time consuming and costly.

So what are the options to make that process easier? Some look towards working with established and trusted players in the market who already have all of the necessary FCA authorisations to operate and are in a position to operate what is known as the Appointed Representative scheme.

We decided to speak to our friends at rebuildingsociety to find out more how they operate their Appointed Representative scheme. Kylie Greeff is their compliance manager.

Kylie can you tell us what the Appointed Representatives initiative is?

The Appointed Representative (AR) programme allows business that are looking to enter the UK peer-to-business lending space to get set up quickly and then operate under another company’s FCA authorisation.

By becoming an AR, firms can enter the P2B lending market not only more rapidly, but also at a lower cost. This allows them to market test their proposition and consider whether to seek full authorisation at a later date.

Why did decide to get involved in the AR programme?

We took the decision to apply for Network Principal status when applying for our own FCA authorisation in October 2014 as we anticipated that the authorisation process might be a challenging and drawn-out process that some platforms might want to avoid. It took us 27 months to achieve our permissions!

How does it work?

Appointed Representatives operate under our FCA permissions; we are fully responsible for their conduct. So, the relationship needs to be one of close collaboration and trust.

Kylie Greeff

Kylie Greeff

To apply to become an AR, a firm must complete our application process, which includes answering questions about their business proposition, the people behind the company, and their plans for operating the firm.

We then thoroughly review the application and decide whether we will be able to work with the firm as an AR. If the applicant is successful, we begin our onboarding process, which involves delivering all necessary training to the team and ensuring that they have all the correct policies and regulatory procedures in place.

After the successful onboarding of an AR, we then work closely with them to get their platform up and running in an efficient and compliant manner.


Can you tell us what criteria a company needs to fulfil to become an Appointed Representative with rebuildingsociety?

Experience of financial services is important, but the lack of it will not immediately rule out a potential AR from our application process. The team behind the AR’s firm must meet the appropriateness test and be suitable to be appointed as Approved Persons on the FCA’s register. The firm must also demonstrate that they have adequate financial resource to manage a platform in a sustainable way. The AR should also ideally be using our white labelled technology provided by White Label Crowdfunding, although, depending on the circumstances, exceptions can be made.

What are some of the additional benefits of using the Appointed Representative idea?

As well as the quicker route to market and reduced setup costs, the benefits of being an AR rather than seeking direct FCA authorisation include integration of proven systems, implementation of tested best practice, mitigation of key start-up risks and an added support structure.

Not only do we understand the compliance involved in operating a regulated P2B lending platform; we also understand what it means to operate a functioning platform on a daily basis. Chances are we’ve already met and dealt with the challenges that our ARs will face, and are able to help them both anticipate the challenges and come up with solutions.

What services does rebuildingsociety offer when working as a Network Principal?

In essence, we provide the regulatory, technical and admin framework, from which firms can run their business.

At the setup and onboarding stage, we assist the ARs in the drafting and implementation of their policies and processes, and ensure that these are suitable to their business model and daily operational needs.

Then on a more long-term basis, we are responsible for approving all financial promotions and marketing material that the AR publishes. We are also responsible for overseeing their client money management, which requires close daily cooperation.

We can also provide additional services to our ARs, such as the management of AML (Anti-Money Laundering) and KYC (Know Your Customer), customer support and customer on-boarding, depending on the company needs.

To what extent is the FCA involved in the scheme?

The FCA have given us permission to operate as a Network Principal. They monitor our performance and expect us to provide adequate resources and skills to manage our ARs, so they do not have any direct contact with them. We are responsible for reporting to the FCA on our own activities as well as those of our ARs.

Is becoming an AR a temporary fix or can it be a permanent solution to a company becoming FCA-accredited?

It can be both. However, we do generally tend to think of the AR-Network Principal relationship as a stepping stone or incubator for businesses wanting to get into the sector. As an AR grows from start-up to medium-sized business to potentially large corporation, they may choose to seek direct authorisation themselves and employ the relevant in-house compliance teams.

Is the relationship between the Network Principal and the Appointed Representative an ongoing one?

It’s an ongoing relationship. We’re in touch with our ARs on a daily basis about various operational functions, largely to do with the management of client money. We also carry out frequent site visits and audits. has recently partnered with Huddle Capital. Can you tell us more about how that collaboration came about, and how it functions?

We onboarded Huddle Capital in May 2016 and have been working closely with them since then. Huddle have now completed a number of transactions and are set for strong growth in 2018. With Huddle Capital being a Leeds-based business like ourselves, we already knew of the team behind the company. Following our authorisation, they approached us about their ambitions to move into the P2B lending market.

We visit the Huddle offices regularly, something made all the more convenient by their location. If we are unable to go and personally see an AR for whatever reason, we work with compliance professionals across the country who understand what we do and are able to provide training and audit services on our behalf.

So there you have it. There are options to move more quickly and effectively into the sector if you wish. For more information on this visit and we say a big thank you to Kylie for answering our questions.

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