These guidelines cover how Storytellers should use their NPCs when interacting with PCs. These are already generally being followed, but we hope to provide something referenceable rather than leaving things ambiguous and unspoken.
These notes are provided not with the intent to stifle the use of NPCs, but rather to avoid PCs gaining unfair advantages. It is extremely difficult to make blanket statements about all cases, so use reasonable judgment and critical thinking when approaching NPCs and considering what is/isn't allowed.
All NPCs must be canon. For the vast majority of NPCs, this means they must have featured in a licensed Storyteller's mission or minigame. Storytellers can feature and thus canonicalize NPCs that do not belong to them (with their owner's permission) - however, that NPC is considered 'owned' by that particular Storyteller unless the actual owner is a licensed Storyteller themself. Which is to say, if [Storyteller] uses [NPC] ([Player]'s OC) in a game, [Player] should avoid running [NPC] on their own unless they themself are licensed.
The main exception to this are backstory NPCs. Obviously, a player character may have family members, loved ones, rivals, etc. However, unless canonicalized in the manner mentioned above, these NPCs should exist solely to support their relevant player character. They should not provide gameplay benefits, and often they should be strictly mundane (until revealed otherwise, via official Storyteller).
All interactions with NPCs that provide character benefit or detriment should be done onscreen (i.e. in a public RP channel). For example, you cannot have a NPC give a PC a gun in DMs, and have that PC use that gun in games. These interactions should be run fairly and within the limitations of usual guidelines (for example, equipment acquisition), with whatever rolls the appropriate Storyteller deems necessary.
Personal interactions and development can be done offscreen (i.e. privately).
Storytellers should avoid conflict of interest at all costs. This means Storytellers cannot have their PC ask their own NPCs for assets or advantages, such as:
create gadgets for you
provide Merits such as Resources, Allies, Contacts, Status, etc
acquire equipment
provide spells
perform favors
Instead, PCs should make connections with NPCs owned by other Storytellers. This serves two purposes: 1) encouraging interactions between players, and 2) preventing Storytellers from creating NPCs solely to give their PCs access to resources outside of the EXP system or their fellow players.
Storytellers can give their PCs "soft" benefits from their own NPCs, primarily in situations where the PC is acting as a NPC. For example, a Storyteller could use their PC to deliver information relevant to a game they are running, or act as the point of contact between other PCs with a NPC faction, etc. The PC technically benefits by having access to information, but ultimately does not gain any advantage for it - instead, they act as another tool in the Storyteller's kit to drive a game/plot.
These restrictions are intended to limit mechanical advantages, not narrative. Obviously, you can have NPCs who teach PCs (where you still spend EXP to actually gain the new ability), pay wages, give gifts, etc.
PCs and NPCs may exist in the same faction. Again, Storytellers should avoid conflicts of interest with their own characters interacting with one another for benefit. PCs interacting with faction NPCs owned by a different player should similarly be careful of conflicts of interest. Faction NPCs should not freely give access to assets and advantages - and sometimes, not even for payment, good social rolls, etc. Storytellers and players alike should apply reasonable judgment in this regard.
Some examples:
A NPC should not make gadgets for PCs without good reason. PCs should avoid being able to simply buy gadgets off of NPCs. Some acceptable reasons may be as a serious, large reward/plothook for a game.
A NPC should not exist to cast spells for PCs, such as acting as a Portal-bot to allow PCs to travel everywhere without having to cast or have Portal themself. Similarly, NPCs should not be used as LM machines. Obviously, you should not create a NPC that has a custom spell of Makes You Immortal and uses it on PCs all the time.
A NPC should not "do everything" for PCs, such as buying things with their Resources 5, loaning their weapons, talking to Allies, etc. NPCs can be used for flavoring a PC's Merits. For example, if a PC has Contacts: Police, then a Storyteller might flavor a use of those Contacts as the PC talking to a faction NPC who is in the know with the local law enforcement.
A good rule of thumb is that NPCs should not be an easy method to get around EXP costs or other game mechanics. If they do offer services, it should be meaningful and responsible. The goal is to make a fun and interesting narrative that challenges players and their characters.
It is the responsibility of the player and the Storyteller to explain why NPCs may refuse to assist PCs, despite being in the same faction, in order to facilitate why PCs have limited access to aid.