Retail Mediation Activities Return (RMAR)

Via the Firms Online section of the FSA web site – click on new users and then Register here.

If you are having problems registering you should contact the Firm Contact Centre on 0845 606 9966.

1. Click on Doing business with the FSA
2. Click on Firms Online which is in the middle of the screen at the bottom
3. Click on Proceed to log in for either Regulatory Reporting (to complete returns) or Regulatory Transactions (to complete forms).

Request a password activation email by clicking on forgotten password on the login screen.

The hyperlink to the password activation web-page can become broken.

To resolve this, either copy and paste each half of the broken link into an Internet Explorer address bar, or contact the Firm Contact Centre on 0845 606 9966.

You may not be in the Regulatory Reporting side of Firms Online or the RMAR may not yet have been generated - RMARs are generated one day after the end of the reporting period. The end of the reporting period can be checked in the firm's Reporting Schedule.

Have you clicked on Edit Draft Return in the Regulatory Reporting side of Firms Online and does the user have Edit Rights?

You can check the rights of a user by clicking into Users, selecting the user, and then clicking on view rights.

If the user does not have edit rights then the Principal User can update these.

Every 6 months for the majority of firms.
Every 3 months for firms with an annual income of more than £5 million.

RMARs are generated the day after the end of a firm's reporting period. Your firm's reporting period is determined by your ARD (Accounting Reference Date).

For example, if your firm has an ARD of 31 December, your RMARs will be generated on 1 January and 1 July each year.

30 working days (6 weeks).
As an example, an RMAR generated on 1 January will have a submission deadline of 12 February.

There are a total of 14 sections of the RMAR. However, firms won't have to complete all of these, as the system tailors the reporting requirements to reflect the firm’s activities. So firms will only see the sections of the return which they must fill in.

For example, a firm that does not carry on insurance mediation will not be required to answer questions in relation to these activities.

Yes. Although insurance mediation activity is one of the regulated activities generally described as a 'retail activity', RMAR reporting is not restricted to firms with retail customers, so you will have to complete the RMAR.

However, there are certain sections that apply only to business with retail customers, for example most of sections G and I. If you only deal with commercial customers, you will not be required to submit this information.

Not unless there are extenuating circumstances. Contact the Firm Contact Centre for further information.

Your firm will be sent a Breach Letter and may be subject to an administrative fee of £250. Ultimately, your firm may be de-authorised.

The information provided is reviewed by software tests and supervision staff. The information tells us what your firm is doing (or not doing) and helps us to focus on individual firm problems and work with the firm to put them right. We will contact you about any issues that we identify and which require further action. Regulated firms must cooperate with the FSA, for example, by responding to requests for further information or taking needed corrective action.

The letter itself will tell you what to do.

Sometimes no response will be required. Instead, the letter will highlight the mistake made by your firm and ask you to be vigilant to this next time round.

Other letters will require an explanation from your firm as to why an error was made. Your firm should then reply to the email address on the letter with that explanation.

Some letters require a resubmission and advise that the RMAR will be reopened on the system within the next few days.

If you are unsure of the purpose of the letter you should contact the Firm Contact Centre .

You can, but the system can take longer than expected to create the necessary PDF document. Your firm can log out of the system during this time.

You can request a re-submission using the menu option within Firms Online.

The balance sheet is a snapshot of the financial health of a company as of a particular date. Therefore, it should be completed as of the last day of the reporting period.

On the basis of UK generally accepted accounting practice (UK GAAP) or International Accounting Standards (IAS).

No, the balance sheet data should be submitted for the firm only, not its Appointed Representatives (ARs).

No. Client money does not belong to the firm and as such should not be included on the firm's balance sheet. Related balancing accounts should also be excluded.

The glossary definition of each of the fields in the Balance Sheet will help you complete the Balance Sheet correctly.

The term 'qualified' in this context means we need to know whether the firm's auditor raised concerns about either the firm's ongoing viability or the accuracy of any of the figures contained in the report. This is not asking whether the auditor was a qualified person.

Examples

• This example shows how a hypothetical mortgage/general insurance mediation firm (which is a sole trader/partnership that does not hold client money) transfers data from the balance sheet to Section A. *Please note these examples are for illustrative purposes only.
• This example shows how a hypothetical mortgage/general insurance mediation firm (which is a sole trader/partnership that holds client money) transfers data from the balance sheet to Section A. *Please note these examples are for illustrative purposes only.
• This example shows how a hypothetical mortgage/general insurance mediation firm (which is a limited company and does not hold client money) transfers data from the balance sheet to Section A. *Please note these examples are for illustrative purposes only.
• This example shows how a hypothetical mortgage/general insurance mediation firm (which is a limited company and holds client money) tranfers data from the balance sheet to Section A. *Please note these examples are for illustrative purposes only.
• This example shows a hypothetical Personal Investment Firm (which is a sole trader / partnership and is a low resource category B3 firm) tranfers data from the balance sheet to Section A. *Please note these examples are for illustrative purposes only.
• This example shows how a hypothetical Personal Investment firm (which is a limited company and is a low resource category B3 firm) transfers data from the balance sheet to Section A. *Please note these examples are for illustrative purposes only.
  

Unlike other sections of the RMAR, the Profit & Loss (P&L) section requires firms to submit cumulative (year to date) data throughout the firm's current financial year (as opposed to just between the start and end reporting period dates) from their accounting reference date. For example:

• 6 and 12 months for firms required to submit half yearly; or
• 3, 6, 9 and 12 months for firms required to submit quarterly.

So, the income that a firm submits in their year end return should include the income that they submitted in their mid-year return.

Gross commission is the entire amount of money that is received by the firm. If the firm passes on some of that commission to another firm the amount retained is the net commission.

The firm should estimate the tax that will be payable on the profits of the business and provide for that in its accounts.

This is regulated business the firm carries out sporadically.
In other words, it is regulated business that is not part of the core business of the firm.

This is money set aside for a specific purpose.
For example, business expansion, bonuses, personal drawings.

You should record here any income that has derived from the relevant FSA regulated activities since the beginning of your firm's financial year, which has not been recorded under commissions or fees.

Such income may include interest on client money, where your firm is permitted to retain this, or payments made by product providers on a basis other than fees or commissions.

It should be reported in line with UK GAAP or IAS, and could be on either basis, depending on the firm’s accounting policies.

Yes, Appointed Representatives are not authorised firms, and business undertaken by them remains the responsibility of the principal firm. So we would expect such firms to be requiring their ARs to report their income to the principal, and to be maintaining appropriate records.

To be clear, income from Appointed Representatives (ARs) should only be included in section B1 – Regulated Business Revenue, not in section B2 Other P&L.

Yes, if the exact income figures are not identifiable. The overall income figure is most important, but we still need the split to be as accurate as possible, so we would expect firms to have a sound basis for any estimates they make.

We use this information to identify trends in the market between fees and commission. This depolarisation status can be used to indicate whether there is a higher risk of product bias. If your firm does not have precise figures for this, an estimate is acceptable.

This is likely to be an estimate, but is still a valid component of the half year P&L.

This example shows how a hypothetical firm that carries out mortgage, general insurance and investment business transfers money from its profit and loss account to Section B *Please note these examples are for illustrative purposes only.

Client money is defined in the Glossary of the FSA handbook but generally:

Client money is money that a firm receives and holds for its clients in the course of carrying on designated investment business or insurance mediation activity.

• In the CASS (Client Assets) sourcebook: This is in the FSA Handbook under Business Standards.
• In the Guide to Client Money for General Insurance Intermediaries: This can be found in the FSA Library.

All questions, bar the final question, will be greyed out. Your firm just has to answer this and then validate the section.

Complete a Variation of Permission Form (VOP).
There is no charge for this as the firm is removing permissions.

Policy documents and wills.

First, the formalities for setting up the different types of bank account are different. Secondly, each type of account is managed differently and the level of capital resources required by the firm is different. Thirdly, firms holding client money in a non-statutory trust bank account must obtain a report from an auditor each year on the adequacy of the firm's systems and controls and have a designated manager to oversee the systems and controls. Further information is available from the FSA's Guide to Client Money for non-investment insurance firms. The guide includes information about setting up and managing client accounts, audit and reporting requirements.

The reportable totals are the client money cash balances as at the last day of the reporting period, taken from the firm’s ledgers as at the date of the RMAR submission. They are not the total entries over the course of the reporting period.

Accordingly, the field 'net client money balance as at reporting date' should show the net balance (credits less debits) on the firm's client money account.

A debit total should not normally arise in relation to a statutory trust, but may occur on a non-statutory trust (where advances of credit are permissible).

Firms have an obligation to reconcile client money accounts every 25 days.

If risk transfer funds are co-mingled with client money in a non-statutory trust, firms should tick both boxes. The whole balance should be reported.

Property management firms that comply with the Royal Institute of Chartered Surveyors (RICS) Members’ Accounts rules or the client money scheme that exists under Section 42 of the Landlord and Tenant Act (LTA) 1987 are not required to comply with the detailed requirements of the FSA client money rules, provided that they satisfy the requirements of CASS 5.5.49R to the extent that the firm will hold money as trustee or otherwise on behalf of its clients. As such, they are permitted to enter zero balances into the fields for client money credit/debit totals.

Worked example*

This example shows how a hypothetical insurance intermediary holding client money in a non-statutory trust client bank account might complete section C.

The purpose of Section D1 is to ensure that a firm is adequately capitalised. It does this by asking a firm to calculate and compare its total capital requirement and its total capital resources - the idea being that a firm's capital resources should be larger than its capital requirement at all times.

We are seeing large numbers of firms answer 'yes' to this question, but it is extremely unlikely that a firm - especially those classed as a General Insurance Intermediary - would be exempt from these capital requirements. Examples of firms that do have an exemption can be found in the help text.

When the question is answered with a 'no' the remainder of Section D1 applicable to the firm should be completed.

If your firm does not have permission to hold client money then the minimum base requirement is £5,000. MIPRU 4.2.11R (1)

If your firm has permission to hold client money then the minimum base requirement is £10,000. MIPRU 4.2.11R (2)

The capital requirement depends on whichever is the larger: the percentage of the firm’s annual income or the firm's base requirement.

Not unless the FSA has placed specific capital requirements on your firm.

This will primarily depend on the policy excess and the annual income of your firm.

Whether your firm has permission to hold client money or not will also come into consideration.

If a firm has an excess of £2,500 or less then it definitely won't have any additional capital requirements in relation to PII. If the firm has a higher excess than this the tables to calculate any excess capital requirements for Professional Indemnity Insurance are in Chapter 3.2.14 of MIPRU (Prudential sourcebook for Mortgage and Insurance intermediaries) and Chapter 13.1.4 (12 E) of IPRU-INV (Interim Prudential sourcebook for Investment businesses).

This figure is the total of those above it:

Base requirement + Other FSA requirement + Additional requirement for PII

This is calculated at the bottom of the form and then taken up and copied into the top part of the form.

This calculation shows whether or not the firm is holding enough resources to cover its total capital requirement. The calculation is as follows:

Total capital resources – Total capital requirement

If you enter an error while completing the Regulatory Capital and Financial Resources, a 'Validation error message' will appear. This is a link to a table of possible messages you will receive when completing Section D1 and how to correct them.

• This example* shows how a hypothetical mortgage/general insurance mediation firm (which is a sole trader/partnership that does not hold client money) transfers data from the Section A to Section D.
• This example* shows how a hypothetical mortgage/general insurance mediation firm (which is a sole trader/partnership that holds client money) transfers data from Section A to Section D.
• This example* shows how a hypothetical mortgage/general insurance mediation firm (which is a limited company and does not hold client money) transfers data from the Section A to Section D.
• This example* shows how a hypothetical mortgage/general insurance mediation firm (which is a limited company and holds client money) tranfers data from Section A to Section D.
  

If you enter an error while completing the Regulatory Capital and Financial Resources, a 'Validation error message' will appear. This is a link to a table of possible messages you will receive when completing Section D2 and how to correct them.

A B3 low resource Personal Investment Firms is only required to complete the Own Funds test (Test 1). Firms should leave Test 1A and Test 2 blank as they are not subject to these tests (IPRU(INV) 13.9.1R).

This example* shows how a hypothetical Personal Investment Firm (which is a sole trader / partnership and is a low resource category B3 firm) tranfers data from Section A to Section D.

This example* shows how a hypothetical Personal Investment firm (which is a limited company and is a low resource category B3 firm) transfers data from Section A to Section D.

If you have further questions please contact the Firm Contact Centre on 0845 606 9966.

RMARs generated after the first week of February 2007 will show minor changes to section E questions and related help text. These changes attempt to make the form easier to complete and produce better quality data. For example, in the past we have contacted a large number of firms that have incorrectly claimed that they are exempt from PII. It should be clearer now that it is highly unlikely you respond 'yes' to this question.

Extra information that is required (e.g., whether your policy has a retroactive start date) should be found on your policy or proposal form.

Professional indemnity insurance covers against the risks of doing a particular job. In other words, it is designed to cover businesses should they be pursued by third parties who claim to have suffered a loss as a consequence of their negligence. Such a claim could arise where, for example, a firm is accused of giving incorrect or misleading advice.

If a claim were upheld then the insurance provider would pay the total amount of the claim (less the policy excess).

A high policy excess can reduce the annual premiums a firm has to pay and can, therefore, be an attractive option for a firm looking for ways to reduce its overheads. However, this will involve the firm taking on an increased level of risk and, therefore, the FSA may require the firm to hold additional capital resources to protect against this risk.

Standard PII policies can also be tailored to allow for specific exclusions or extensions. Again, however, this may result in the firm being required to hold additional resources.

MIPRU (Prudential sourcebook for Mortgage and Insurance intermediaries): Chapter 3
IPRU-INV (Interim Prudential sourcebook for Investment businesses): Chapter 13

This question asks whether a firm is required to hold PII. In our experience, the vast majority of regulated firms are required to hold PII cover.

Please note if you state that you are exempt, you will be contacted to give details of why you are exempt. This is because the rules require that a firm declaring it is exempt must have an enforceable written agreement in place with an 'appropriate person'. This should guarantee the person will meet the firm's valid investor claims to the same limit as the limit of indemnity required under the rules for that type of firm. This is called a 'comparable guarantee'. Please see below for details of comparable guarantees.

For a personal finance firm, a comparable guarantee must be provided by a bank, building society, insurer or a friendly society. Where the firm is in the same group in which there is a bank, building society, insurer or friendly society, then the comparable guarantee must be provided by that institution.

For a general insurance intermediary, a comparable guarantee can be provided by an authorised person who has net tangible assets of more than £10 million. Where the firm is in the same group as a person that has net tangible assets of £10 million, the comparable guarantee must be provided by that person.

For mortgage intermediaries, a comparable guarantee can be provided by an authorised person who has net tangible assets of £1 million. Where the mortgage intermediary is in the same group as a person with net tangible assets of £1 million, that comparable guarantee must be provided by that person.

The full requirements of the exemptions are covered in the FSA Handbook at:

• rule 13.1.5 of the Interim Prudential Sourcebook for Investment Businesses in respect of personal investment firms; and
• rule 3.1.1 of the Prudential sourcebook for Mortgage and Home Finance Firms, and Insurance Intermediaries.
  Before declaring an exemption from a requirement to hold PII, firms are advised to refer to the appropriate rules.

If further clarification of the rules is required, firms are advised to contact the Firm Contact Centre.

You should answer 'yes' if you have renewed your policy within the last reporting period (normally six months). This will then open up a second screen of the PII form for completion. You should only answer 'no' if you renewed your PII cover more than six months previously in which case details will be contained in the previous RMAR submission.

In calculating the amount of additional capital required, firms conducting investment business should consult the table in IPRU(INV) 13.1.4(12). For mortgage and general insurance business, firms should consult the tables in MIPRU 3.2.14. These three tables are recreated by the calculators below. Select your firm's highest excess and expected annual income from the appropriate drop-down lists to reveal the additional capital your firm is required to hold for increased excesses.

The amount of additional capital a firm is required to hold to cover its high excesses needs to be entered in Section D as well as in Section E of the RMAR.

In the "list of Data items" view, use the small red cross to the left of the policy name to delete a policy.

For an insurance intermediary the minimum limits of indemnity are set out in MIPRU 3.2.7 and are:

1. For a single claim: €1 million.
2. In aggregate: €1.5 million or, if higher, 10% of annual income up to £30 million.
   

Firms should only enter business types for increased excesses if the firm has undertaken that type of business in the past, currently undertakes it, or may undertake it in the future. If the firm has an increased excess (for example in relation to split capital investment trusts), but has not and does not intend to undertake this line of business, then this excess should not be included in the answer to increased excess(es) for specific business types.

In calculating the amount of additional capital required, investment firms should consult the table in IPRU(INV) 13.1.4(12) and, for mortgage and general insurance firms should consult MIPRU 3.2.14.

The RMAR is a six monthly process and PII is generally an annual arrangement, so the amount of additional capital required to be calculated is on the basis of the firms expected annual income.

The amount of additional capital a firm is required to hold to cover its high excesses needs to be entered in this field in Section D1 as well as in Section E.

We only expect information regarding exclusions from a PII policy for business types the firm currently undertakes, may undertake, or has undertaken in the past. If the firm has an exclusion, for example for split capital investment trusts, but has not and does not intend to undertake the business, this exclusion does not need to be included in the answer to this question.

Please follow the attached link to find a more detailed illustation of how to complete your policy details in Section E Part 2. Illustration.

Those firms that are exempt from the close links reporting requirements are listed in the relevant parts of the table in SUP 16.1.3R (Supervision sourcebook, Chapter 16), and include:

• Sole traders
• Personal Investment Firms (PIFs) and Mortgage and General Insurance Firms (M&GI)
  

Those firms that are exempt from the controllers reporting requirements are again listed in the relevant parts of the table in SUP 16.1.3R and include:

• Sole traders
• Personal Investment Firms (PIFs) and Mortgage and General Insurance Firms (M&GI)
  

You should only answer 'Yes' to any of these questions if we have not previously been notified of the change. For example, if your firm has filled out the Change in control form and submitted it to the FSA, then we have previously been notified and the answer to this question should be 'no'.

There is a Close Link (CL) between the firm and another person or entity if the relationship between the two falls into one of the categories below.

• CL is a parent undertaking of your firm
• CL is a subsidiary undertaking of your firm
• CL is a parent undertaking of a subsidiary undertaking of your firm
• CL is a subsidiary undertaking of a parent undertaking of your firm
• CL owns or controls 20% or more of the voting rights or capital of your firm.
• Your firm owns or controls 20% or more of the voting rights or capital of CL

Further information can be found in COND 2.3.7 G (1), with a flowchart at COND 2 Annex 1.

All staff who work for the firm as at the period end, including administrative staff, self-employed staff, ARs etc. (Note that for secondary ARs (e.g. car dealers, estate agents) it is acceptable to include only the staff carrying on regulated activities, as the principal firm will not always know total staff numbers.)

Firms should include all competent advisors in the firm. For example, if the firm is a sole trader with employed advisers and the proprietor is assessed as competent, then the proprietor should be included in the total number that have been assessed as competent.

Specifically, as stated in GIGI 4.1.5: 'It is a matter for firms to decide what competence is necessary for their employees to perform their role effectively and comply with the relevant regulatory requirements.'

Firms should only state the number of staff who have been assessed as competent who supervise non-competent staff. If you are a sole trader you do not need to supervise yourself.

The form was designed assuming that one advisor can, in theory, give advice in more than one area. As a result, the total head count can be less than the sum of the constituents, but not greater. Firms must never enter false figures to exploit the system.

Renewals: under 'repeat customers'
New customers from personal recommendations: referrals from non-authorised introducers.
Sales arising from more than one category: tick both boxes

Core business is where the greatest proportion of the gross business arises. Firms should state 'Other' if this is non-regulated business.

All firms should ensure they have complaints handling procedures in place that meet the requirements under Dispute Resolution:Complaints Handbook (DISP).

We accept that the current layout of Section H could be clearer. Future returns may ask these questions for separate business types. In the meantime, provide a combined answer for all 3 RMAR-related business types. See the RMAR Guidance notes for further help.

An Appointed Representative (AR) is a firm that has chosen not to become directly authorised itself but has instead entered into an agreement with a directly authorised firm who accepts responsibility for the AR's actions in relation to the AR's regulated business. An AR is therefore a separate firm and is not to be mistaken for your own sales advisor or member of staff, the details of which are captured in Section G.

No, only new sales should be included.

Broadly, the regulated activity is likely to be carried on when a firm helps a customer to complete a claim form. It will not include merely giving the form to the customer, giving general pointers on how to fill in the form or supplying information in support of the claim.

Yes, provided this is undertaken on behalf of the policyholder.

Yes, even if your firm does not receive premiums itself you should be reporting the aggregate premium amount for the reporting period.

No, only in the first period where the claim arises.

The firm should only tick the product types in which it does business. If the firm does not undertake business in any of the product types in the list, it should leave the row blank.

A non investment insurance chain exists where a firm passes business to another intermediary rather than directly to a product provider, forming a 'chain'.

Dealing as agent is where the intermediary can bind risk on behalf of the insurer, without further reference to the insurer. Please refer to PERG 5.5 for rules and guidance relating to this permission.

Regular policy premiums received for a policy should be reported only once as an annualised figure in the return for the period that covers the date of the sale. There is then no need to report in subsequent returns. An annualised figure is also required if a poilcy premium is paid in one single payment.

Yes. For reporting purposes you should disclose all critical illness sales i.e. both standalone products and sales as rider benefit to other policies. Please note that if critical illness is sold as a rider benefit to another product type, for example term assurance policy or payment protection, please ensure that the transaction is reported under the product type 'Critical illness' and the other relevant product type, for example 'Life assurance (or term assurance)' or 'Creditor - Payment protection'.

Mortgage and general insurance firms are required to insert a net annual income figure for mortgage and insurance mediation activities in the appropriate box in the 'FSA' column.

Firms that undertake investment mediation activities should insert the number of advisers that give advice to customers that are eligible to seek redress from Financial Ombudsman Service/Financial Services Compensation Scheme. This figure should be inserted in the relevant box in the 'FOS' column.

This is dependent on your firm's Accounting Reference Date (ARD).

The table below can be used by firm's to determine which return they should be completed Section J in.

No. You should use the figures from your last set of full year's accounts

Helptext is available on the completion of section J.

Also, further information is available in the fees section of our website.

Alternatively, you can contact the fees helpline on 020 7066 1888 or by email to fsafees@fsa.gov.uk.