05Mar

A firm registered in London has had its application for lending permissions refused by the Financial Conduct Authority (FCA). The reasons for the refusal centre around uncertainty as to whether the firm could meet the FCA’s threshold conditions, including the need to have a head office in the UK.

The FCA said it was not satisfied that the firm:

“a. as a body incorporated in the UK, has its head and registered office in the UK;
b. can be effectively supervised by the Authority; and
c. is ready, willing and organised to comply with the requirements and standards under the regulatory system.”

“In light of the above, the Authority cannot ensure that, if the Application were granted, [the firm] would satisfy, and continue to satisfy, threshold conditions 2B (Location of offices), 2C (Effective supervision) and 2E (Suitability).”

Both of the firm’s directors, and the individual named in the application as the Chief Financial Officer (CFO), are residents and citizens of Canada.

The firm’s main business activity is educating students on historical developments in the financial services industry. It charges £500 per book to provide its students with antique law dictionaries and research materials and enters into loan agreements with its students to allow them to purchase these materials should they wish, hence the need for the firm to seek permission from the FCA to operate as a lender.

In the application, the firm said that its London address was its principal place of business. In subsequent communications with the FCA, the firm promised that the nominated CFO would be moving to the UK, and that it would commence paying rent for its UK office by a specified date. However, no such confirmation was ever received.

As a result of the uncertainty about whether the firm really was based in the UK, and the lack of response to various information requests, the FCA concluded that the firm has:

“a. failed to provide evidence that its head and registered office is located in the UK;
b. failed to provide adequate information to enable the Authority to determine whether it is complying with regulatory requirements (i.e. whether its head office and/or senior management is located in the UK);
c. has not been open and co-operative in all its dealings with the Authority; and
d. failed to demonstrate that it is ready, willing and organised to comply with the requirements and standards under the regulatory system.”

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.