The limits of the UK overseas persons exclusion and of the appointed representative route for Swiss firms

Where the exclusion stops

The overseas persons exclusion is activity-specific, and the activities it names are the ones a broker or adviser performs. Article 72 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 excludes, for an overseas person, dealing in investments as principal (article 14) where the transaction is with or through an authorised or exempt person, or with a person in the United Kingdom as the result of a legitimate approach; dealing as agent (article 21) on a broadly similar footing (article 72(2)); arranging (article 25), but only where the arrangements are made with an authorised person or an exempt person (article 72(3)), or are made with a view to transactions which, as respects transactions in the United Kingdom, are confined to transactions entered into by authorised or exempt persons (article 72(4)), there being no legitimate-approach limb for arranging; and advising (article 53) and providing targeted support (article 55A) as the result of a legitimate approach (article 72(5)). Article 72(6) then excludes, from article 64, an agreement made by an overseas person to carry on arranging, managing investments (article 37), assisting in the administration of insurance, safeguarding (article 40) or sending dematerialised instructions, again only where the agreement results from a legitimate approach. A legitimate approach, under article 72(7), is either an approach made to the overseas person that it has not solicited, or has solicited in a way that does not contravene section 21 of the Act, or an approach made by or on behalf of the overseas person in a way that does not contravene section 21.

Read against a Swiss portfolio manager's business, the list leaves a gap. The exclusion covers agreeing to manage, but nothing in article 72 excludes the managing itself, and nothing excludes safeguarding and administering assets. For those two activities the questions are whether the activity is carried on in the United Kingdom at all, which is a territorial analysis under section 418 of the Financial Services and Markets Act 2000 and the general law on where an activity takes place, and whether the client and the service are inside the Agreement, in which case the Swiss firm's BFSA registration answers the point for covered clients and covered services through the separate exclusion in article 72ZA, which since 1 January 2026 excludes articles 14, 21, 25, 37, 40, 53(1) and 64 for a registered Swiss supplier acting within its register entry and from Switzerland. A discretionary mandate run from Zurich for a UK private client who fails the Annex 5 net-asset test, or for a UK charity or trust that fits none of the three categories, is the residue this update is about.

The territorial analysis is where much of the practical work happens, and it is fact-driven. A mandate managed from Switzerland for a client who is in the United Kingdom, with no UK office, no UK staff and no UK decision-taking, is in our judgement defensible as an activity carried on outside the United Kingdom, and it then needs no exclusion, although the FCA's guidance states that a person based outside the United Kingdom may carry on activities there without a UK place of business, for example by means of the internet (PERG 2.4.6G). The position weakens with every UK element added: a London presence from which the relationship is run, relationship managers who spend part of the year in the United Kingdom, or marketing that amounts to carrying on business there. Section 418 extends "in the United Kingdom" to defined cases, including where the registered office (or head office) is in the United Kingdom and day-to-day management is the responsibility of a UK office (section 418(4)), and where a firm with its head office abroad carries on the activity from an establishment it maintains in the United Kingdom (section 418(5)); for those cases it is irrelevant where the client is situated (section 418(6)). The FCA's perimeter guidance in PERG 2.4 sets out the regulator's own reading of the rest. In our judgement a Swiss firm whose UK-based people take or carry out investment decisions for a mandate will find it hard to maintain that the managing is carried on outside the United Kingdom, and the analysis has to follow what each UK person and office actually does. A firm that carries on any activity listed in article 3(1), or offers to do so, from a permanent place of business it maintains in the United Kingdom is not an overseas person, and article 72 is then unavailable to it for every activity; at that point the choice becomes the one we set out in our note on branches and subsidiaries.

What an appointed representative may do

The appointed representative regime is an exemption from the general prohibition, and it is drawn narrowly. Under section 39 of the Act, a person other than an authorised person who is a party to a contract with an authorised person, the principal, which permits or requires it to carry on business of a prescribed description and complies with the prescribed requirements, and for whose activities in that business the principal has accepted responsibility in writing, is exempt in relation to the regulated activities comprised in that business. Two features follow from the wording. The representative must, subject to a narrow exception for certain insurance-only permissions (section 39(1C) to (1E)), be a person other than an authorised person, so a Swiss investment firm that holds its own Part 4A permission cannot also be an appointed representative. And the principal is responsible, under section 39(3), for anything the representative does or omits in that business to the same extent as if it had expressly permitted it, which is why the principal's oversight duties are as heavy as they are.

The "prescribed description" of business is the list in regulation 2 of the Financial Services and Markets Act 2000 (Appointed Representatives) Regulations 2001. For an investment business the list is arranging deals in investments (article 25) relating to securities, relevant investments or structured deposits; advising on investments (article 53); and safeguarding only in the form of arranging for one or more other persons to safeguard and administer assets (article 40 in that limited form). The list also includes agreeing to carry on those activities (article 64) and, where the principal is an investment firm or credit institution of the kind regulation 2(1A) describes, placing financial instruments and advising on placing. Dealing as agent appears only for certain contracts of insurance and funeral plans, which means a representative cannot execute client transactions in securities as agent. Managing investments does not appear at all. The regulation therefore delivers the same answer as article 72 from the other side: an appointed representative can advise a UK client and arrange the client's transactions, under a principal's name and responsibility, and cannot run the client's portfolio or hold the client's assets. The contract must also carry the terms regulation 3 prescribes, and where the principal is an investment firm or a qualifying credit institution and the business is investment services business, the representative must be entered on the FCA's record before the exemption applies (section 39(1A)).

What the route offers a Swiss house is therefore a UK-facing advisory or introducing presence without its own authorisation: people who may advise UK clients and arrange their business, whose conduct is the principal's regulatory responsibility, and who appear on the FCA register as the principal's representatives. What it does not offer is a way to manage UK client assets from the United Kingdom, or to hold them. A firm whose UK plan is discretionary management has to look to the Agreement for covered clients where the mandate is managed from Switzerland (article 72ZA(1)(b)), and to a Part 4A permission for management carried on in the United Kingdom, which includes any management from a UK office.

Overseas appointed representatives: what the FCA expects of the principal

Nothing in section 39 requires a representative to be in the United Kingdom, and the FCA's own guidance treats firms with a head office outside the United Kingdom as a category, the overseas appointed representative. The guidance also assumes a UK nexus. The FCA's page on overseas appointed representatives (last updated 7 May 2025) lists the challenges it expects a principal to address, differences in legal and regulatory requirements, distance, language and consumer protection among them, asks principals, in their annual self-assessment, to consider the additional risks of overseas representatives when assessing their controls and resources under SUP 12.4.2R(3), points them to SUP 10A for the approved-persons position of individuals who spend time in the United Kingdom, and states that a principal that cannot adequately monitor an overseas representative, or whose representative does not carry on regulated activity in the United Kingdom, should consider terminating the agreement.

The last point matters for Swiss firms. A Swiss adviser whose contact with UK clients runs entirely from Zurich will often be outside the UK perimeter on the territorial analysis or inside the overseas persons exclusion, and in either case it does not need a principal; the FCA's guidance suggests that a principal should consider terminating such an appointment, which makes it a poor basis for making one. Where neither holds, for example after an approach that was not a legitimate one or for arranging outside article 72(3) and (4), the activity is in the United Kingdom and a principal may be what is needed. The representative route earns its place where the Swiss firm's advising or arranging for UK clients is regulated activity carried on in the United Kingdom, whether through UK-based advisers, a UK office or contact from Switzerland that falls outside the exclusion, where a principal can monitor it adequately, and where the cost and time of a Part 4A permission are out of proportion to that business. The principal's general duties, as the FCA describes them on its page for principal firms (last updated 26 November 2025), are a written agreement setting out what business the representative may do, an assessment before appointment that the representative is fit and proper, financially stable and suitable, notification to the FCA at least 30 days before the appointment takes effect, regular review of the representative's activities, business and senior management, and an annual self-assessment. The FCA's page on overseas appointed representatives adds that the agreement must require an overseas representative to comply with relevant rules (SUP 12.5.5R), including, for example, the communication requirements for business from non-UK offices in GEN 4.4.1R. In our judgement the commercial price of the route is set by those duties: a principal that takes them seriously will want access, information and a fee that reflects the responsibility section 39(3) places on it for the business it has accepted.

One point the Agreement does not answer in terms is whether a firm on the FCA's BFSA register may also act as an appointed representative for business the Agreement does not cover. Registration under the Agreement works through an exclusion, article 72ZA, so a registered firm is not an authorised person and section 39 does not bar it in terms; article 72(13) and (14) switch the general overseas persons exclusion off for a registered Swiss supplier only where the activity is in substance the same as the one on its register entry. The Agreement's own limits speak to Part 4A permissions and to UK branches, and say nothing about representative status. We would treat the combination as a question to put to the FCA before building a structure on it, with the answer recorded.

Marketing: the approver permission and the representative's exemption

The second reason the representative route comes up is financial promotion. Since 7 February 2024 an authorised person may approve the content of an unauthorised person's financial promotion only where it holds permission to do so from the FCA under section 55NA of the Act, subject to exemptions in regulations made under section 55NB, and an approval given without that permission is treated as a contravention of a requirement imposed by the FCA. The approver permission confines the approval of third-party promotions to authorised persons that hold it, which narrows the field of firms a Swiss firm can turn to where it runs a marketing-led strategy under the overseas persons exclusion and every promotional approach has to fit a financial-promotion exemption or be approved by an authorised person.

The representative route sidesteps the permission for the representative's own promotions. Regulation 3 of the Financial Services and Markets Act 2000 (Exemptions from Financial Promotion General Requirement) Regulations 2023 disapplies section 55NA(1) where the content of the communication is prepared by the approver itself, by an unauthorised person in the same group, or by the approver's appointed representative in relation to the business for which the principal has accepted responsibility. A principal may therefore approve its representative's promotions without holding the approver permission, and the representative's marketing to UK clients rests on the principal's approval and the principal's responsibility. For a firm registered under the Agreement the parallel relief is the exemption in article 73ZB of the Financial Promotion Order for registered Swiss suppliers, for registered services to relevant clients within the register entry, which we described in our note on the client test; for a firm on the exclusion alone, the choice is an exemption of its own or a section 55NA approver.

How the four routes fit together

The routes are complementary, and in our judgement the workable structures combine them by activity and client. Registration under the Agreement carries the covered services for covered clients, including portfolio management for clients who pass the Annex 5 tests, and it carries the article 73ZB promotion relief with it. The overseas persons exclusion carries dealing and advising from Switzerland for clients the Agreement does not cover, on a legitimate approach and with a promotion exemption or an approver behind the marketing, and arranging only within the narrower limits of article 72(3) and (4); it also carries an agreement to manage or safeguard where the mandate is then performed from outside the United Kingdom. The appointed representative route carries advising and arranging for uncovered clients where that business is regulated activity in the United Kingdom, whether carried on from a UK base or from Switzerland, under a principal and not for management or custody. A Part 4A permission carries everything else, which in practice means discretionary management and custody performed in the United Kingdom, through a branch or a subsidiary.

The sequencing point is the same as in our earlier notes. The list of UK business the Agreement cannot reach, by client, instrument and activity, decides the structure; the representative route belongs in that list as an option for the advisory residue, priced with the principal's duties in mind; and for the two activities in bold in Figure 1, managing and safeguarding, neither the exclusion nor a principal is available.

What this means for you

• Separate the mandate from the approach. Article 72 excludes agreeing to manage or safeguard on a legitimate approach; it does not exclude the managing or the safeguarding. For those activities the questions are territorial scope and the Agreement.
• Read regulation 2 before you take an appointed representative proposal seriously. A representative may advise and arrange, and may arrange for another to safeguard. It may not manage investments, execute securities transactions as agent or hold assets, and it may not be an authorised person.
• Use the route where there is UK regulated activity that a principal can monitor. The FCA's guidance on overseas representatives states that a principal that cannot adequately monitor an overseas representative, or whose representative carries on no regulated activity in the United Kingdom, should consider terminating the agreement. A Zurich-only adviser that is outside the perimeter or within the exclusion needs no principal.
• Price the principal's duties into the fee. Written agreement, fit-and-proper assessment, 30-day prior notification, regular review, annual self-assessment and section 39(3) responsibility for everything the representative does in the business the principal has accepted. In our judgement a low quote suggests the duties are being underestimated.
• Plan the promotions with the route. Registered under the Agreement: article 73ZB, for registered services to relevant clients within the register entry. Appointed representative: the principal approves under SI 2023/966, without the approver permission, for promotions within the business it has accepted. Exclusion only: an exemption of your own, or approval by an authorised person that holds the section 55NA approver permission.
• Put the BFSA-plus-representative question to the FCA in writing before combining the two, and keep the answer with the register entry.

Isak Legal advises Swiss financial institutions and asset managers on UK market access under the Berne Financial Services Agreement, the overseas persons exclusion, appointed representative arrangements and the choice between cross-border service, a UK branch and a UK subsidiary. The Regulated Activities Order, section 39 and section 55NA of the Financial Services and Markets Act 2000, the Appointed Representatives Regulations 2001 and the Exemptions from Financial Promotion General Requirement Regulations 2023 are the primary sources; the FCA's pages on principal firms and overseas appointed representatives carry the regulator's expectations. See our Financial Regulation and United Kingdom pages, or get in touch.

This client update is provided for general information only, reflects the position as at 8 September 2026 and does not constitute legal advice or create a lawyer-client relationship. The overseas persons exclusion and the Swiss-supplier exclusion are taken from articles 72 and 72ZA of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001; the appointed representative exemption from section 39 of the Act and regulations 2 and 3 of the Financial Services and Markets Act 2000 (Appointed Representatives) Regulations 2001; the approver requirement from section 55NA of the Act and regulation 3 of the Financial Services and Markets Act 2000 (Exemptions from Financial Promotion General Requirement) Regulations 2023. The FCA's expectations of principals are drawn from its published pages, which are guidance and are updated from time to time; the territorial analysis under section 418 of the Act and PERG 2.4 is fact-specific and is stated in general terms only. Verify the current texts at the official sources linked above before acting. For advice on a specific matter, please contact us.