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FINAL NOTICE

ACTION

1. By way of an application dated 31 January 2015, (“the Application”), Carbon

Reduction Group Limited (“Carbon Reduction”) applied under section 55A of the
Act for Part 4A permission to carry on the regulated activity of Green Deal
Broking.

2. The Application is incomplete.

3. For the reasons listed below, the Authority has refused the Application.

SUMMARY OF REASONS

4. By its Warning Notice dated 7 September 2015 (“the Warning Notice”) the

Authority gave notice that it proposed to refuse the Application and that Carbon
Reduction was entitled to make representations to the Authority about that
proposed action.

5. As no representations have been received by the Authority from Carbon

Reduction within the time allowed by the Warning Notice, the default procedures
in paragraph 2.3.2 of the Authority’s Decision Procedure and Penalties Manual

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apply, permitting the Authority to treat the matters referred to in its Warning
Notice as undisputed and, accordingly, to give a Decision Notice.

6. By its Decision notice dated 16 October 2015 (“the Decision Notice”), the

Authority gave Carbon Reduction notice that it had decided to take the action
described above.

7. Carbon Reduction had 28 days from the date the Decision Notice was given to

refer the matter to the Upper Tribunal (formerly known as the Financial Services
and Markets Tribunal). No referral was made to the Upper Tribunal within this
period of time or to date.

8. Under section 390(1) of the Act, the Authority, having decided to refuse the

Application and there having been no reference of that decision to the Tribunal,
must give Carbon Reduction Final Notice of its refusal.

9. The Authority decided to refuse the Application and to give this Final Notice as

Carbon Reduction has failed to provide the information required by the Authority
and, in the absence of the information sought, the Authority cannot ensure that
Carbon Reduction will satisfy, and continue to satisfy, the threshold conditions set
out in Schedule 6 of the Act.

DEFINITIONS

10. The definitions below are used in this Final Notice.

“the Act” means the Financial Services and Markets Act 2000

“the Authority” means the body corporate previously known as the Financial
Services Authority and renamed on 1 April 2013 as the Financial Conduct
Authority

FACTS AND MATTERS

11. The Application was received on 30 January 2015.

12. Further information was requested from Carbon Reduction under section 55U(5)

of the Act. Details of all the communications between the Authority and Carbon
Reduction are set out below:

i. On 30 January 2015, the Application was received by the Authority. The

Application provided the personal email address of one of its directors, Mr
Daniel John, as the contact email address.

ii. On 12 February 2015, Mr John emailed the Authority requesting that future

emails be sent to his professional email address.

iii. On 24 February 2015, the Authority telephoned Carbon Reduction and spoke

to Mr John’s personal assistant. They stated that Mr John was not available
and was reluctant to take a message. Mr John’s personal assistant appeared
agitated and terminated the call whilst the Authority was explaining the
importance of liaising with the regulator. The Authority took the decision
that future contact with Carbon Reduction should only be made in writing.

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iv. On 13 April 2015, Carbon Reduction terminated the appointments of Mr

Matthew Benjamin and Mr John as its directors, and appointed Mr Andrew
Carroll as a new director. The Authority was not notified of this change.

v. On 16 April 2015, Carbon Reduction changed its registered address with

Companies House from Unit 2, St. Johns Court, Enterprise Park, Swansea,
SA6 8QQ, to Arfryn Intervalley Road, Banwen, Neath, West Glamorgan,
SA10 9LR. The Authority was not notified of this change.

vi. On 11 May 2015, the Authority sent an email to both Mr John’s business and

personal email addresses advising that it had come to the attention of the
Authority that the firm’s directors and address registered with Companies
House had been amended and were now different to those in the
Application. The Authority requested the following information to be
provided by 15 May 2015:

i. a completed Form A in order for Mr Carroll to perform the

Controlled Function (CF8) for Carbon Reduction, and

ii. a completed Form B for the withdrawal of the Approved Person

application by Mr John.

vii. On 12 May 2015, the email sent by the Authority on 11 May 2015 to Mr

John’s professional email address was returned undelivered due to a
‘permanent error’.

viii. On 13 May 2015, the Authority sent a letter to Carbon Reduction at its

registered address containing the same information as in its email of 11 May
2015.

ix. On 26 May 2015, the Authority sent a letter by Special Delivery to Carbon

Reduction at its registered address. The Authority gave a deadline of 9 June
2015 for Carbon Reduction to provide the information requested. The letter
stressed that failure to provide the information might result in the
Application being recommended for refusal to the Authority’s Regulatory
Transactions Committee. The letter was signed for on 27 May 2015 by Mr
Carroll.

x. On 9 June 2015, Carbon Reduction changed its registered address with

Companies House from Arfryn Intervalley Road, Banwen, Neath, West
Glamorgan, SA10 9LR, to Trw Automotive Works, Resolven, Neath, SA11
4HN. The Authority was not notified of this change.

xi. On 10 June 2015, the Authority sent a letter by Special Delivery to Carbon

Reduction at its previously registered address: Arfryn Intervalley Road,
Banwen, Neath, West Glamorgan, SA10 9LR. The Authority gave a deadline
of 24 June 2015 for Carbon Reduction to provide the information requested.
The letter again stressed that failure to provide the information might result
in the Application being recommended for refusal to the Authority’s
Regulatory Transactions Committee.

xii. On 25 June 2015, the Authority sent a letter by Special Delivery to Carbon

Reduction at its previously registered address: Arfryn Intervalley Road,
Banwen, Neath, West Glamorgan, SA10 9LR. The Authority gave a deadline
of 9 July 2015 for Carbon Reduction to provide the information requested.

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As well as highlighting again the possibility of a Warning Notice being
issued, the correspondence advised Carbon Reduction how to withdraw the
application should they wish to do so.

xiii. The letter sent 10 June 2015 was delivered after it was collected from the

Royal Mail sorting office on 15 June 2015. The letters sent to Carbon
Reduction on 13 May 2015 and 25 June 2015 were ‘not called for’. The
letters have subsequently been returned to the Authority. The email sent on
11 May 2015 to Mr John’s professional email address was returned
undelivered due to a ‘permanent error’.

13. During the above period, the Authority received no response to the

communications sent to Carbon Reduction. Therefore the Authority has been
unable to determine the Application as Carbon Reduction has failed to provide
any response to the Authority’s requests for information.

IMPACT ON THRESHOLD CONDITIONS

14. The regulatory provisions relevant to this Decision Notice are referred to in

Annex A.

15. By virtue of Carbon Reduction’s failure to provide the requested information and

by its failure from 11 May 2015 to reply at all to the Authority’s correspondence,
the Authority cannot ensure that Carbon Reduction satisfies, and will continue to
satisfy, the following threshold conditions:

2C (Effective Supervision)

i.
Carbon Reduction’s failure to provide the Authority with the requested
information calls into question whether the Authority would be able to obtain
(on an ongoing basis) sufficient information about Carbon Reduction and its
activities such that the Authority would be able to effectively supervise the
firm.

2D (Appropriate Resources)

ii.
In failing to respond to the Authority’s requests and correspondence in the
manner set out above, Carbon Reduction has been unable to satisfy the
Authority that it has the appropriate human resources.

2E (Suitability)

iii.
The failure by Carbon Reduction to supply the information requested means it
is not being open and co-operative with the Authority or being ready, willing
and organised to comply in its dealings with the Authority.

16. On the basis of the facts and matters described above the Authority has

concluded that Carbon Reduction will not satisfy, and continue to satisfy, the
threshold conditions in relation to the regulated activity for which Carbon
Reduction would have permission if the Application were granted.

IMPORTANT NOTICES

17. This Final Notice is given under section 390(1) of the Act.

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18. Sections 391(4), 391(6) and 391(7) of the Act apply to the publication of

information about the matter to which this Notice relates. Under those provisions,
the Authority must publish such information about the matter to which this Notice
relates as the Authority considers appropriate. The information may be published
in such manner as the Authority considers appropriate. However, the Authority
may not publish information if such publication would, in the opinion of the
Authority, be unfair to you or prejudicial to the interests of consumers or
detrimental to the stability of the UK financial system.

19. The Authority intends to publish such information about the matter to which this

Final Notice relates as it considers appropriate.

Authority contacts

20. For more information concerning this matter generally, contact Sunil Thakar,

Manager, Credit Authorisations Division at the Authority (direct line: 020 7066
5996 / email: Sunil.Thakar@fca.org.uk).

Lucy McClements
on behalf of the Regulatory Transactions Committee

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ANNEX A – REGULATORY PROVISIONS RELEVANT TO THIS FINAL NOTICE

1. Section 55A(1) of the Act provides for an application for permission to carry on

one or more regulated activities to be made to the appropriate regulator. Section
55A(2) defines the “appropriate regulator” for different applications.

2. Section 55B(3) of the Act provides that, in giving or varying permission, imposing

or varying a requirement, or giving consent, under any provision of Part 4A of the
Act, each regulator must ensure that the person concerned will satisfy, and
continue to satisfy, in relation to all of the regulated activities for which the
person has or will have permission, the threshold conditions for which that
regulator is responsible.

3. The threshold conditions are set out in schedule 6 of the Act. In brief, the

threshold conditions relate to:

(1)
Threshold condition 2B: Location of offices

(2)
Threshold condition 2C: Effective supervision

(3)
Threshold condition 2D: Appropriate resources

(4)
Threshold condition 2E: Suitability

(5)
Threshold condition 2F: Business model

Relevant provisions of the Authority’s Handbook

4. In exercising its powers in relation to the granting of a Part 4A permission, the

Authority must have regard to guidance published in the Authority Handbook,
including the part titled Threshold Conditions (COND). The main considerations in
relation to the action specified are set out below.

Principles for Businesses

5. PRIN 2.1.1R, Principle 11 states that a firm must deal with its regulators in an

open and co-operative way, and must disclose to the appropriate regulator
appropriately anything relating to the firm of which that regulator would
reasonably expect notice

Threshold Conditions in general

6. COND 1.3.2G(2) states that, in relation to threshold conditions 2D to 2F, the

Authority will consider whether a firm is ready, willing and organised to comply
on a continuing basis with the requirements and standards under the regulatory
system which will apply to the firm if it is granted Part 4A permission.

7. COND 1.3.3AG provides that, in determining the weight to be given to any

relevant matter, the Authority will consider its significance in relation to the
regulated activities for which the firm has, or will have, permission in the context
of its ability to supervise the firm adequately, having regard to the Authority’s
statutory objectives. In this context, a series of matters may be significant when

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taken together, even though each of them in isolation might not give serious
cause for concern.

Threshold Condition 2C: Effective Supervision

8. COND 2.3.3G states that, in assessing the threshold condition set out in

paragraph 2C of Schedule 6 to the Act, factors which the Authority will take into
consideration include, among other things, whether it is likely that the Authority
will receive adequate information from the firm to determine whether it is
complying with the requirements and standards under the regulatory system for
which the Authority is responsible and to identify and assess the impact on its
statutory objectives; this will include consideration of whether the firm is ready,
willing and organised to comply with Principle 11 (Relations with regulators) and
the part of the Authority Handbook titled Supervision regarding the provision of
information to the Authority.

Threshold Condition 2D: Appropriate resources

9. COND 2.4.1BG states that the relevant appropriate resources for threshold

condition 2D are set out in paragraph 2D of Schedule 6 to the Act.

10. COND 2.4.2G(2) provides that, non-financial resources of the firm will include

human resources.

11. COND 2.4.2G(2A) provides that, ‘non-financial resources’ of the firm include

human resources it has available.

Threshold condition 2E: Suitability

12. COND 2.5.2G(2) states that the Authority will also take into consideration

anything that could influence a firm's continuing ability to satisfy the threshold
conditions set out in paragraphs 2E and 3D of Schedule 6 to the Act. Examples
include the firm's position within a UK or international group, information
provided by overseas regulators about the firm, and the firm's plans to seek to
vary its Part 4A permission to carry on additional regulated activities once it has
been granted that permission.

13. COND 1.3.3BG provides that, in determining whether the firm will satisfy, and

continue to satisfy, the threshold conditions, the Authority will have regard to all
relevant matters, whether arising in the United Kingdom or elsewhere.

14. COND 2.5.6G provides that examples of the kind of particular considerations to

which the Authority may have regard when assessing whether a firm will satisfy,
and continue to satisfy, this threshold condition include, but are not limited to,
whether the firm has been open and co-operative in all its dealings with the
Authority (see Principle 11 (Relations with regulators)) and is ready, willing and
organised to comply with the requirements and standards under the regulatory
system.