The Financial Conduct Authority (FCA) has declined a London-based firm’s application for permission to operate as a lender. The regulator had concerns over whether the firm was actually based in the UK, and over the accuracy of certain information supplied by the firm.
Although it only made an application for consumer credit permissions in late 2015, the firm has actually been registered with the FCA since October 2013, for the purposes of the Money Laundering Regulations 2007. A London address was provided as the firm’s principal place of business at that time, but checks made by the FCA show that the firm has in fact not operated from that address since August 2014 at the latest.
The application for lending permissions gives another London address as the principal place of business, however the FCA claims that this is not the firm’s operational centre, as the location is only occupied by an agent who provides mail forwarding services for the firm.
The lending permissions application also nominated an individual to act as director, and to carry out controlled functions. The application gave a London address for this individual and said that he had been resident there since 2009. However, this is inconsistent with information held at Companies House, which suggests that the person is resident in Malaysia. A letter sent to his supposed London address in August 2017 was returned undelivered.
Despite claiming that it had various documents, including the regulatory business plan, opening and forecast balance sheets, compliance monitoring plan and arrears procedures, ready for submission to the FCA, the firm failed to reply to requests for this information to be provided. When the documentation was finally received, the regulator found it to be “simplistic [and] undeveloped”, and added that it “contained little information about how the firm is structured to comply with the requirements of SYSC and CONC.”
Later communications from the FCA to the firm also failed to produce a response, including requests for the regulator to visit the firm’s offices.
Summarising the reasons for its refusal, the FCA says in a Final Notice:
“The Authority considers that [the firm] does not maintain any physical presence in the UK and, accordingly, that it does not satisfy the requirement of threshold condition 2B that its head office be located in the UK.”
“[The firm] appears to have submitted inaccurate information to the Authority concerning its principal place of business and the residential address of its director and/or has failed to update information previously provided.
[The firm] has been unable to respond to straightforward enquiries as to its business operations and requests for documents in a timely manner and, when submitted, this information provided has been incomplete and of poor quality.
[The firm] appears to have no physical presence in the UK. Accordingly, the Authority is concerned that it would not be able to obtain (on an ongoing basis) sufficient information about [the firm]’s activities.
As a result, the Authority considers that it does not satisfy the requirement of threshold condition 2C, that it be capable of being effectively supervised by the Authority.
The Authority considers that [the firm] has not demonstrated that it has sufficient resources, and is ready, willing and organised to comply with its regulatory requirements. Accordingly, the Authority considers that it does not satisfy the requirement of threshold condition 2D, that its resources are appropriate in relation to the regulated activities that it seeks to carry on.”
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