You can’t stand under my umbrella

The Greensill Capital debacle revealed the lender was operating in the UK without a licence, by “piggybacking” off regulatory hosting firm Mirabella’s permissions. Now, the FCA is investigating the industry’s regulatory hosting provision service, the appointed representative (AR) scheme, to consider its appropriateness as well as principal firms’ ability to monitor what their ARs are doing.

But how does private equity use the AR structure? What impact will the FCA’s investigation have on the industry and should it be worried?

While private equity firms operating in the UK are regulated by the FCA, they technically don’t need to be directly authorised by the regulator.