05Feb

The Financial Conduct Authority (FCA) has announced that it has refused an application from Veena Bhandari to act as chief executive of Bedford-based stockbroker and investment adviser William Albert Securities Limited.

The application for her to carry out this function was made in April 2014. In July 2015, the FCA issued a Warning Notice stating that it was minded to refuse the application, and invited the firm and Mrs Bhandari to make representations. In October 2015, the FCA issued a Decision Notice proposing to refuse the application, and when the firm failed to appeal against this decision, then the regulator issued its Final Notice.

The FCA says it received only limited information to allow it to determine Mrs Bhandari’s competence and capability, in the form of a brief CV. The firm and Mrs Bhandari refused the FCA’s invitations to an interview to discuss the matter of the missing information.

Mrs Bhandari was a director of William Albert Securities from 2007 to 2014 (i.e. a CF1 function in the FCA’s Approved Persons Regime), and briefly carried out the Apportionment and Oversight function (CF8) after this time.

The firm says it declined the invitations to interview as it believed the FCA should have had sufficient information from the previous competency assessment to be able to reach a decision. The FCA says however that it never carried out an assessment of her fitness to carry out the chief executive role (CF3), and that it cannot be assumed that because she was deemed competent to carry out other roles, that she would automatically have been considered competent to be the chief executive.

This case illustrates that just because an individual has been deemed competent to carry out one senior role, it does not automatically follow that they are competent to carry out another. It also illustrates how co-operation with the FCA is vitally important, and as the regulator pointed out in its Final Notice, it is entitled to request that applicants supply information in the way that it desires. The FCA did not take kindly to the firm’s suggestion that it should email its queries rather than conduct a formal interview with Mrs Bhandari.

Under the forthcoming Senior Managers & Certification Regime, the decision as to whether to appoint someone to a senior position would fall to the firm and not to the FCA. This regime will be introduced in the banking industry in March 2016, and in the rest of the financial services industry in 2018. Under the new Regime, it would have been William Albert Securities that decided whether to appoint Mrs Bhandari as its CEO, not the FCA. But for now, the regulator must approve all appointments of directors, senior managers, heads of compliance, anti-money laundering officers etc.

As of February 1 2016, the William Albert Securities website shows Mrs Bhandari as the ‘Director and Chairperson’.

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.