What Can an Appointed Representative Do? Five Common Business Models We Host
Are you thinking of launching a business conducting regulated activities in the UK? Becoming an Appointed Representative (AR) is one of the fastest routes to market. Most Laven clients are carrying out regulated activities within one to two months.
But what can an AR actually do? Our ARs operate under three core permissions:
- Advising on investments (except pension transfers and opt-outs)
- Arranging (bringing about) deals in investments
- Making arrangements with a view to transactions in investments
All business is with professional clients and eligible counterparties only. ARs cannot hold client money or assets or execute trades, although Laven offers other alternative solutions should this be required.
In practice, our hosted ARs fall into five broad groups. Many work across more than one, and the list is not exhaustive.
Fund advisory
Many ARs act as the UK investment adviser to domestic funds, or funds whose manager sits elsewhere, often a Cayman, Luxembourg or Irish structures. The AR researches opportunities and makes recommendations, while the fund manager keeps discretion and makes the final investment decision. This non-discretionary model suits hedge fund, private equity, private credit and real estate teams that want a UK regulated presence without building a fully authorised firm.
If you need discretionary portfolio management, Laven’s separate asset management platform lets managers run strategies under our AIFM and MiFID permissions instead (contact us for further details).
Fund distribution
Third-party marketers, placement agents and capital introduction specialists use AR status to market funds to professional investors in the UK. Typical activities include introducing investors, running roadshows and helping with fundraising. Laven reviews and approves the ARs’ financial promotions, and the fund must have the correct UK marketing notifications in place, for example under the National Private Placement Regime (NPPR).
Deal arrangers
Deal arrangers bring investors and opportunities together. They might arrange co-investments, club deals, private placements, private debt and bond issues, or investments in special purpose vehicles (SPVs). Increasingly, these activities may happen on an online deal-making platform or private forum. The permissions for arranging deals and making arrangements are what allow this activity. They cover both setting up a specific transaction and providing an ongoing way for investors to take part in deals.
Corporate finance and M&A
Boutique corporate finance advisers use AR status to advise on and arrange capital raises, pre-IPO rounds, debt financing, and mergers and acquisitions that involve buying or selling shares. Because this work often involves inside information, our ARs follow strict Market Abuse Regulation (MAR) controls, including insider lists, information barriers and documented market soundings. Compliance support is built in from day one.
Alpha capture and research distribution
Analysts and investment professionals who submit trade ideas to alpha capture platforms, or who produce and distribute investment research and market commentary, may be advising on investments. Hosting gives them a regulated framework to work within. Non-independent research is treated as a marketing communication under FCA rules, so Laven reviews it, and personal account dealing and conflicts of interest are actively monitored.
Staying ahead of regulatory change
Our compliance team horizon-scans regulatory developments, tells ARs what is changing and what it means for them, and helps update procedures when new rules arrive.
A current example is the FCA’s consultation on client categorisation (CP25/36). The FCA has proposed removing the quantitative test for elective professional clients, which relies on trading frequency, portfolio size and financial sector experience. Many experienced private markets investors struggle to meet it. The test would be replaced by a strengthened qualitative assessment and a new route for clients with at least £10 million in investable assets. For private equity and venture capital firms, this could make it easier to treat experienced angel investors, entrepreneurs, senior executives and co-investors as professional clients. In return, firms would need clients’ informed, signed consent. We will keep our ARs updated as the rules are finalised.
Why host with Laven?
As an AR, you do not need to appoint your own SMF16/17 compliance officer, file FCA regulatory returns or hold regulatory capital. You get a ready-made compliance infrastructure: a compliance manual, policies, AML and market abuse training, and monitoring through our Leo RegTech platform. Fees grow with your business. We have supported fund managers, advisers and deal-makers since 2005.
Not sure which model fits your business? Speak to our regulatory hosting team to find out how quickly you could be up and running as an Appointed Representative.
