The Financial Conduct Authority (FCA) has confirmed its fine and ban on Clive Rosier, after he was denied leave to appeal against the sanctions by the Court of Appeal.
The long-running saga dates back to May 2013, when the FCA proposed to take action against Mr Rosier over deficiencies in his advice regarding Unregulated Collective Investment Schemes (UCIS).
Mr Rosier failed to:
- Conduct sufficient fact-finding before advising his clients on their investment needs
- Ensure the suitability of his advice
- Handle complaints from clients in accordance with the relevant rules
- Communicate clearly with the FCA regarding a review of Geared Traded Endowment Policies that he was asked to complete
- Record the application of exemptions to section 238(1) of the Financial Services and Markets Act, which dictates which individuals a UCIS can be promoted to
- Gather sufficient management information
- Assess his own performance to ensure that he stayed up-to-date with regulatory requirements
Mr Rosier also failed to pay his Financial Services Compensation Scheme levy.
Mr Rosier appealed to the Upper Tribunal against the original FCA enforcement action. Upper Tribunal judge Timothy Herrington said in his May 2015 judgement:
“We have found that in carrying out his functions as a director of Bayliss, as the person responsible for the processes and procedures that Bayliss followed in its dealings with its clients Mr Rosier fell below the standards to be expected of a person performing those functions.”
When he was unsuccessful at the Tribunal, he decided to take the case to the Court of Appeal.
Oxfordshire-based Mr Rosier must now pay a fine of £10,000. He is prohibited from carrying out any significant influence functions at an authorised firm, and the regulatory permission of his firm, Bayliss & Company (Financial Services) Ltd, has been cancelled.
UCIS are undoubtedly high-risk products, and many individuals and firms have been subject to enforcement action for giving unsuitable advice to clients to invest in these schemes.
A collective investment scheme, otherwise known as a ‘pooled investment’, is a fund that several people contribute to. A fund manager then invests the pooled money in assets.
UCIS are high-risk for a number of reasons. They often invest in assets that are difficult to value accurately, such as fine wine, crops and timber. They are not traded on a recognised stock exchange and it can be impossible for investors to access their money at short notice. Investors can lose a significant proportion of their original investment if a UCIS goes wrong. Clients who invest in UCIS may also not have recourse to the Financial Services Compensation Scheme.
Mr Rosier failed to comply with the regulations regarding the marketing of UCIS. These cannot be marketed to ordinary retail investors, and should only be targeted at:
- Certified high net worth investors
- Sophisticated investors and self-certified sophisticated investors
- Those who already have an existing UCIS
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.