93.This section makes an exemption from the general prohibition for appointed representatives of authorised persons.  An authorised person cannot be an appointed representative.  The exemption only applies if the authorised person, referred to as the principal, has:
	contracted with the representative for the latter to carry on the relevant sort of investment business on their behalf; and
	accepted responsibility in writing for the conduct of those regulated activities.
94.Any regulated activities which are carried on by the representative in accordance with such an arrangement are the responsibility of the principal, who must therefore have permission for all the regulated activities they carry on.  The Authority may therefore take regulatory action against the principal in respect of anything said or done (or not said or not done) by the representative in carrying on the regulated activities as if they had expressly authorised the action or inaction in question.  Such acts or omissions will be taken into account by the Authority in determining whether the principal has breached any rules or requirements under the Act.  However, nothing in this section would make the principal liable to prosecution for a criminal offence in place of the representative.  The representative may also be subject to the arrangements under Part V.
95.This section is similar to, and replaces, section 44 of the FS Act 1986.  The Treasury have the power to limit the types of business that may be carried on under this exemption.  The intention is that an order under subsection (1) will broadly reproduce the breadth of the provision under the FS Act 1986, except that it will no longer be possible under this section for an appointed representative to be exempt for some activities and authorised for others.  Under a single authorisation regime, it would not be appropriate to allow an authorised person to obtain an exemption rather than have their permission extended to cover those additional activities.
96.The Treasury have the power to prescribe further conditions which the contract between the principal and his representative has to meet.  The intention is that this power would be used to reproduce the detailed requirements in sections 44(4) and (5) of the FS Act 1986.  These are aimed at ensuring that the principal has adequate control over the activities that the appointed representative may carry on for the benefit of, or on behalf of, other providers of investment products to ensure that the exemption is not misused.
Commentary on Sections Part Iii: Authorisation and Exemption Section 39: Exemption of appointed representatives