19Nov

An individual has had an application for a senior manager role at a firm with credit permissions refused by the FCA. This was largely due to non-disclosure.

The Financial Conduct Authority has refused an application for an individual to carry out a senior management function, largely because of his failure to disclose that he had been subject to disciplinary action in the past.

The firm in question is a Chorley, Lancashire-based sporting goods retailer which holds limited scope consumer credit permissions from the FCA.

Senior managers at authorised firms are required “to disclose appropriately any information of which the Authority would reasonably expect notice.” The individual was a qualified solicitor, and the Solicitors Regulation Authority started disciplinary proceedings against him in August 2018. Although the case was dismissed in April 2020 because the case against him was unproven, the FCA would still have expected him to disclose these matters in the application.

His argument was that the disciplinary matters were not related to areas regulated by the FCA, and that the allegations were baseless. However, the FCA rejected this.

When the application was made in December 2019, he replied No to all of the following questions, even though he would have been expected to realise that these answers were incorrect:

Has the candidate ever been:

  • The subject of any proceedings of a disciplinary nature (whether or not the proceedings resulted in any finding against the candidate)?
  • The subject of any investigation which has led or might lead to disciplinary proceedings?
  • Notified of any potential proceedings of a disciplinary nature against the candidate?
  • The subject of an investigation into allegations of misconduct or malpractice in connection with any business activity? (This question covers internal investigation by an authorised firm, as well as investigation by a regulatory body, at any time.)

As can be seen, none of these questions say anything about the outcome of the investigations, so the mere fact that the proceedings commenced should have been enough to justify a Yes answer to these questions. Furthermore, the SRA investigation was still ongoing at the time of his FCA authorisation application.

The regulator also notes that:

  • In his application, he only committed to providing services to the firm for three hours per year. The FCA Notice says that “dedicating 3 hours per year to the performance of the SMF29 function, one aspect of which is overseeing the maintenance of the firm’s systems and controls, falls short of what is required to adequately monitor the firm”
  • The application said that the individual was employed by the firm at the time of his application to carry out the senior management function. However, FCA investigations demonstrated that this was not the case. The SMF29 function can only be allocated to a CEO, director or a senior manager at the firm, i.e., someone who is already employed by the firm

At Scott Robert, we are able to assist you with every step of the application process when seeking approval of your senior managers. We can also help with any other aspect of the Senior Managers and Certification Regime. Speak to one of our experts today to find out more by calling 0161 914 5727.