Your regulatory hosting platform designed by experienced operators for emerging asset managers, corporate finance firms and fintech platforms.
Your regulatory hosting platform designed by experienced operators for emerging asset managers, corporate finance firms and fintech platforms.
We use this experience to support our Appointed Representative in their growth journey.
We do not claim to know the latest hot spots to eat in town, but we do share insights and straightforward experience across your regulatory needs. Our approach reflects our passion and deep expertise, and we’re excited to share it with you.
Whether your strategy be Venture, Private Equity, Hedge, or Real Estate we provide you the framework to operate with any AIFM or Fund Admin whilst also being registered with the Regulator. This means no secondee model, allowing you to build your regulatory track record from day 1.
Whether you raise capital from Institutional or Certified High Net Worth / Sophisticated investors, we provide you the comfort that you can cross jurisdictions whilst being fully regulated for your activity. This provides both your clients and your investor network reassurance on your activity.
Whether you operate a syndicate deploying into SPVs or a technology first approach to fundraising we provide you with the ability to onboard and operate with clients and investors with ease.
This means if you are located in the UK or EU we can assist you in operating your business with full regulator cover whether it be a fund, corporate finance firm, investment platform or syndicate.
Most operators in the private markets work under "market norms".
Putting it simply, High-Net-Worth and Sophisticated investors are not Professional investors. They are Retail investors with waived protection.
When fundraising from US clients, you must have Chaperoning rights. This means anyone investors you talk to needs to have more than $100m AUM and must be registered.
We can allow you to do both, reach out to learn how.
Market norms use nominee entities but as a financial professional, if you want to warehouse these into your fund or into a new structure, whilst your investors are well set you might not be.
Reach out to learn more.
Get in touch and we’ll explain more, and if nothing else we aim to impart some clear insight as you build your regulatory journey.
Below you’ll find some common questions our clients ask.
What jurisdictions does Leela Capital cover?
Leela Capital can provide its clients regulatory cover in the UK, across the EU and in the US. Please note permissions vary by jurisdiction so please enquiry or book a call to find out more.
What is an Appointed Representative (“AR”)?
AR’s operate under the FCA’s Appointed Representative regime which allows a business to carry out regulated activities without direct authorisation. Instead, an AR operates under the regulatory permissions of a principal firm. The principal firm is responsible for the AR’s services and products, and therefore must ensure the AR’s activity is compliant. The EU and US have similar but not identical regimes and operate in similar manner.
What are the benefits of becoming an AR instead of obtaining direct FCA authorisation?
Becoming an AR offers faster market entry, lower up front costs, and reduced ongoing administrative burdens as the principal firm handles much of the compliance oversight and regulatory obligations. To this extent, the Principal firm will assist in setting up the compliance infrastructure of the AR and provide the AR with the appropriate support.
What does a principal firm do for me as an AR?
The principal firm provides regulatory cover, supervises your activities, ensures compliance with FCA rules, and may offer additional support, such as training, compliance frameworks, and reporting systems.
How long does it take to become an AR?
We typically complete our due diligence within one week which is then submitted to the FCA who take a further 6 weeks. This can however take up to 12 weeks depending on the backlog they FCA are working through. This is in comparison to a 12-month process for direct authorisation.
Are there any limitations to operating as an AR?
Yes, an AR can only carry out the regulated activities that the principal firm agrees to oversee. It is important to ensure that the principal firm has the appropriate permissions for your business model, including the right client type.
What kind of due diligence will the principal firm conduct on me or my firm?
Principal Firms must make sufficient checks on the firm looking to become an AR. The due diligence process includes assessing your business model, regulatory experience, financial stability, senior management's fitness and propriety, and compliance with anti-money laundering (AML) and other relevant regulations. The principal firm’s is required to collect and assess three core areas of potential ARs: Business Model, Capability and Experience, and Financial stability. This therefore requires the principal firm to seek several documents such as:
- A business plan,
- Financial projections,
- Ownership structure, Identification, work experience, financial and criminal checks and references for each Approved Person.
What is the difference between an Appointed Representative and an Approved Person?
An Appointed Representative is the firm that is registered on the FCA directory under the Principal firm. An Approved Person is the person who is registered under the AR to carry out the regulated activity.
How does the principal firm supervise my activities?
Supervision typically includes regular reporting, compliance audits, monitoring of financial promotions, and ongoing training. The intensity of supervision will depend on the complexity and risk of your business activities.
Can I switch to a different principal firm later?
Yes, but the process involves notifying the FCA, ensuring a smooth transition to a new principal, and maintaining compliance throughout the process.
What are the costs associated with becoming an AR?
Costs typically include an initial onboarding fee and ongoing monthly or annual supervision fees. Additional costs may arise for tailored compliance support or training.
Are there any hidden fees I should be aware of?
Principal firms are required to disclose all fees upfront, but you should review the contract carefully for charges related to additional services or regulatory breaches.
What regulatory obligations do I have as an AR?
While the principal firm assumes overall regulatory responsibility, you are still required to follow FCA rules, such as consumer duty, treating customers fairly, adhering to financial promotion standards, and complying with anti-money laundering regulations.
What happens if I breach FCA rules as an AR?
If you breach FCA rules, the principal firm will address the issue, which may involve retraining, additional oversight, or even terminating your agreement. Serious breaches can lead to enforcement action by the FCA against both you and the principal firm.
Am I eligible to become an AR?
Eligibility depends on your business activities, the alignment of those activities with the principal firm's permissions, and the due diligence assessment. Certainhigh-risk activities may not be suitable under the AR regime.
Can I still operate unregulated activities as an AR?
Yes, you can operate unregulated activities alongside your AR activities, provided these do not conflict with FCA rules or create undue risks.
Can I transition to direct FCA authorisation later?
Yes, many ARs use the regime as a stepping stone to direct authorisation. We also encourage our clients once they reach a certain size to go for direct authorisation. The experience and compliance track record gained as an AR canstrengthen your application for direct authorisation. Also, our compliance monitoring programme is built upon our expertise and third-party software. All of which can be lifted and adapted into your direct authorisation processes. Whilst we do not offer consulting services, we will be on hand to ensure we save you significant costs.
How long does it take to transition from AR status to direct authorisation?
The FCA’s authorisation process for direct applications can take 6–12 months, depending on the complexity of your business and the quality of your application.
What happens if my agreement with the principal firm ends?
You must cease all regulated activities unless you secure a new principal firm or obtain direct FCA authorisation. There may also be contractual obligations related to termination.
Will the principal firm provide training or compliance support?
Yes, we offer training, templates, and guidance to help you meet your compliance obligations.
What happens if the FCA introduces new rules for ARs?
Principal firms are required to ensure compliance with any new FCA rules. This may involve updating your processes, contracts, or supervision arrangements.
Can I operate internationally as an AR?
Operating internationally depends on the scope of the principal firm's permissions. At Leela Capital we have coverage in the UK, across the EU and in the US.
As an AR can we hold client monies?
No, this is not a service that can be ported to an AR. Whilst we do not have this permission ourselves, we work with several providers across all jurisdictions.
As an AR can we be the Alternative Investment Fund Manager (“AIFM”)?
No, this is not a service that can be ported to an AR. Whilst we do not have this permission ourselves, we advise several AIFMs providing greater ownership and control to the AR across all jurisdictions.
Are High-Net-Worth (“HNW”) and Sophisticated investors deemed to be professional clients form a regulatory view?
No, they are still treated as Retail clients but have waived some of their regulatory protection by electing up to High-Net-Worth (“HNW”) or Sophisticated status.
What does the compliance monitoring programme practically look like?
At Leela Capital we have a blend of technology and human compliance. This is managed through our compliance technology platform and regular virtual and in-person meetings. The frequency of meetings will depend on your business model.
