FCA updates trading-name guidance

The Financial Conduct Authority has updated its guidance on the use of trading names following concerns raised by the National Association of Commercial Finance Brokers (“NACFB”).

The revised wording reinforces that firms must not imply they are authorised or supervised for activities outside their permissions, and that a trading name must not create a misleading impression about their regulatory status or authorised business.

Where a purported trading style is actually a separate entity, such as a sole trader, partnership or limited company, it cannot simply be treated as a trading name and may need to be registered as an Appointed Representative. A firm’s FCA permissions do not automatically extend to another entity operating under its trading style.

Sarah Cunningham, NACFB head of compliance, said, “This has been an issue for several months, and the updated guidance reinforces the position we have shared with Members. Lenders should take care when accepting introductions made under a trading style, as unclear regulatory status may create enforceability issues and could lead to claims under the introducer agreement.”

Firms and networks operating under different trading names that would like further clarity on their appropriate use should contact the NACFB compliance team.

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