Enforcement

Issue 1115 / 24 June 2021

Overview

  • Refusal to vary Part 4A permission of agency broker – FCA publishes Final Notice

Financial Conduct Authority

Refusal to vary Part 4A permission of agency broker - FCA publishes Final Notice - 24 June 2021

The FCA has published a Final Notice issued to Gedik International Ltd, an agency broker, in which the FCA refuses the firm’s application under section 55H of the Financial Services and Markets Act 2000 (FSMA) for a variation to its Part 4A permission. To enable the firm to trade in an additional financial product, it applied to vary its permission to include arranging, safeguarding and administration of assets and rolling spot FX (across all current activities for which the firm has permission). The FCA considered the firm’s contention that the variation would not affect the firm’s business model or financial forecasts to be incorrect. The additional permission would have enabled the firm to trade a new product, “creating a new, prospective stream of revenue and with a different operational flow, thereby necessitating changes to the firm’s internal systems”.

The FCA concluded that the firm could not be relied on to provide accurate and reliable information relating to the application as it had not considered how the proposed new permissions would impact its current operations, and whether its systems and controls more widely would be fit for purpose in relation to the proposed variation of permission. As such, it considered that, if the application were granted, there was no certainty that the firm would satisfy and continue to satisfy, in relation to all of the regulated activities for which the firm would have permission, the threshold conditions (in particular, the effective supervision and appropriate resources threshold conditions). The FCA also did not consider that the firm would satisfy the appropriate resources threshold condition, including systems and controls that are fit for purpose and adequately skilled and competent human resources.

Final notice: Gedik International Ltd (FRN 916641)