FCA Perimeter Guidance Manual Update Flags Pending Targeted Support and Cryptoasset Perimeter Change

Key Takeaways

• The FCA's Perimeter Guidance Manual (PERG) sets out when firms need authorization or exemption under the Financial Services and Markets Act 2000.
• The current text carries a notice that PERG has not yet been updated for the new regulated activity of providing targeted support, and it highlights the cryptoasset guidance in PERG 18.
• Compliance teams should treat the perimeter analysis for these areas as provisional and watch for further FCA changes.

Deep Dive

The FCA's Perimeter Guidance Manual (PERG) sets out when firms need authorization or exemption under the Financial Services and Markets Act 2000. The current text carries a notice that PERG has not yet been updated for the new regulated activity of providing targeted support, and it highlights the cryptoasset guidance in PERG 18. Compliance teams should treat the perimeter analysis for these areas as provisional and watch for further FCA changes.

The excerpt covers PERG 1 (application, purpose, status of guidance, and a map of chapters) and the opening of PERG 2 (authorization and regulated activities). It does not introduce new obligations. It restates that the guidance is issued under section 139A of the Act, represents the FCA's views, and does not bind the courts. It also states that a person who acts in line with the guidance will be treated by the FCA as having complied with the aspects of the requirement to which the guidance relates. The guidance is not exhaustive, and firms must still consult the Act, the Regulated Activities Order, and related secondary legislation.

The most significant points are the repeated notes that PERG has not yet been updated for the new regulated activity of providing targeted support, and that the FCA is considering what changes are needed. Firms building or offering guidance-type or targeted support propositions therefore lack definitive perimeter guidance and must rely on their own legal analysis. PERG 18 is the dedicated chapter on regulated cryptoasset activities, qualifying cryptoassets, and qualifying stablecoins. PERG 2.2.4A and 2.2.4B direct firms to PERG 2 Annex 2 and the PERG 18 decision tree for those activities. The source text gives no specific effective dates or deadlines, and the excerpt is truncated partway through PERG 2.3.2, so nothing beyond that point has been analyzed.

The consequences of a perimeter breach are serious and are restated in PERG 2.2. Breaching the general prohibition (section 19) is a criminal offense carrying up to two years' imprisonment and an unlimited fine. The only defense is showing that all reasonable precautions and due diligence were exercised. Agreements may also be unenforceable (sections 26 to 29), including regulated credit agreements made by authorized persons acting outside their permission (section 26A). Financial promotions are separately restricted under section 21.

Recommended actions:
- Re-run perimeter assessments for any targeted support, cryptoasset, or financial promotion activity, using the PERG 2.2.3 question sequence and documenting the conclusions.
- Check that existing Part 4A permissions cover current activities, especially for firms expanding into crypto or credit-related activities.
- Document any reliance on PERG guidance and legal advice, because it supports the FCA's compliance footing but does not bind courts.
- Monitor FCA publications for PERG updates, and use SUP 9 for individual guidance where uncertainty remains.
- Review the deleted and legacy references, including the Insurance Mediation Directive guidance that the FCA says remains relevant under the Insurance Distribution Directive (IDD).

Overall regulatory risk is moderate. The main exposure is perimeter uncertainty in newer activities, where an incorrect assessment could lead to criminal liability, unenforceable contracts, and enforcement action.

Source: Financial Conduct Authority