For the reasons given in this notice, the Authority has decided to:
impose on Miss Parry, pursuant to section 66 of the Act, a financial penalty
of £109,400 (inclusive of interest); and
make an order against Miss Parry, pursuant to section 56 of the Act,
prohibiting Miss Parry from performing any function in relation to any
regulated activity carried on by any authorised person, exempt person or
exempt professional firm.
Miss Parry provided verifiable evidence of serious financial hardship. Had it not
been for her reduced financial circumstances, the Authority would have imposed a
financial penalty of £157,395 plus interest (or £135,100 adjusted for a 30% (stage
1) discount) on Miss Parry.
SUMMARY OF REASONS
The RDR, launched by the Authority in 2006, was a wide ranging review of the
retail investment market. From the beginning of 2013, the Authority implemented
a new set of rules stemming from that review. Under those rules, the minimum
level of qualification for all retail investment advisers was raised, and all individual
retail investment advisers were required to hold an SPS. An SPS is evidence that
an accredited body that meets the Authority’s criteria has independently verified
that the retail investment adviser holds an appropriate qualification, has satisfied
the appropriate continuing professional development requirement and has met the
requisite ethical standard.
The Authority considers that Miss Parry, whilst approved to perform the CF30
Customer function at her sole trader firm which was authorised by the Authority,
fabricated two SPSs, in order to give the impression to the Authority that she had
obtained the appropriate qualifications from her professional body to provide
investment advice to retail customers, when, in fact, she was not so qualified.
The Authority also considers that Miss Parry made misleading statements, to the
Authority on 29 January 2013, 3 May 2013, 16 July 2013, 23 October 2013, 12
June 2014 and 3 September 2015, with the intention of making the Authority
believe that she had attained the appropriate qualifications to provide investment
advice to retail customers and that she had engaged in numerous dealings with her
professional body as to why it had not supplied her with an SPS.
The Authority considers that Miss Parry’s behaviour amounted to a failure to act
with integrity in contravention of Statement of Principle 1 of the Authority’s
Statements of Principle.
The Authority considers that Miss Parry poses a risk to consumers and to the
integrity of the financial system and that the nature and seriousness of the
breaches outlined above warrant the imposition of a financial penalty and the
imposition of an order prohibiting her from performing any function in relation to
any regulated activities carried on by any authorised or exempt person or exempt
The definitions below are used in this Final Notice (and in the Annexes):
“the Act” means the Financial Services and Markets Act 2000;
“APER” means the Statements of Principle and Code of Practice for Approved
“the Authority” means the Financial Conduct Authority;
“the CII” means the Chartered Insurance Institute;
“DEPP” means the Decision Procedure and Penalties Manual section of the
“EG” means the Enforcement Guide;
“FIT” means the Fit and Proper Test for Approved Persons section of the
“Miss Parry” means Elizabeth Anne Parry;
“Miss Parry’s Part 4A permission” means the permission granted to Miss Parry
pursuant to Part 4A of the Act;
“PSD form” means Professional Standards Data form;
“QCF” means Qualifications Credit Framework;
“SPS” means Statement of Professional Standing;
“the Handbook” means the Authority’s Handbook of rules and guidance;
“the Relevant Period” means the period from 29 January 2013 to 12 November
“the RDR” means the Retail Distribution Review;
“the Statements of Principle” means the Statements of Principle as set out in
“the TC” means the Training and Competence section of the Handbook; and
“the Tribunal” means the Upper Tribunal (Tax and Chancery Chamber).
FACTS AND MATTERS
Miss Parry was authorised by the Authority as a sole trader on 23 May 2006 to
conduct designated investment business and regulated home finance activities.
Miss Parry was also permitted to conduct consumer credit activities from 7 January
On 1 November 2007, the Authority approved Miss Parry to perform the CF30
Customer function at her sole trader firm.
On 19 November 2015, following an application by Miss Parry, the Authority
cancelled Miss Parry’s Part 4A permission.
The Authority launched the RDR in June 2006. The RDR was a wide ranging review
of the retail investment market. The proposals stemming from it were intended to
ensure that financial advice is given by appropriately qualified financial advisers
free from bias, and to ensure that the costs of their advice are clear to customers.
On 31 December 2012, the Authority implemented the RDR, in part through the
introduction of new requirements in the TC. These new rules raised the benchmark
qualification level for all retail investment advisers and introduced an overarching
standard for continuing professional development, in order to raise professional
standards. All individual investment advisers were required to reach the QCF Level
4 or equivalent and hold an SPS. An SPS is evidence that an accredited body, such
as the CII, has independently verified that the retail investment adviser holds the
appropriate qualifications, has satisfied the appropriate continuing professional
development requirement and has met the requisite ethical standard.
Miss Parry’s provision of two fabricated SPSs and her misleading communications to the
Miss Parry was a retail investment adviser. On 29 January 2013, Miss Parry
submitted to the Authority a PSD form, stating that she was fully qualified to
provide retail investment advice to retail customers and that she had been
accredited by the CII, which had issued an SPS to her confirming that she had
attained the appropriate qualifications.
In early 2013, the Authority contacted Miss Parry about the new RDR requirements
in the TC. Specifically, the Authority had concerns that she had not been accredited
by the CII as she had claimed in the PSD form she submitted to the Authority on
29 January 2013.
On 3 May 2013, Miss Parry informed the Authority that she had been in contact
with the CII on numerous occasions to find out why the CII’s database did not show
that she had acquired an SPS through the CII. She stated that the CII had
explained the reason its database did not show her SPS was that she had changed
her surname after a divorce, from Thompson to Parry, and that the system had not
reconciled the records of examinations she had taken in each name.
On 16 July 2013, the Authority telephoned Miss Parry who stated that she had
spoken to the CII again and was hopeful that her SPS would be issued by the end
of that week.
On 6 September 2013, Miss Parry sent an email to the Authority (in response to the
Authority’s email chasing her for her SPS), stating that she had telephoned the CII
but that her contact at the CII was on annual leave and that she would provide the
Authority with an update during the following week.
On 14 October 2013, Miss Parry sent an email to the Authority, stating that she
had spoken to the CII at length in relation to her SPS and that the CII had
informed her it had still not resolved the issue of merging her online data for her
different names and qualifications. Miss Parry stated that her case had been
referred to the head of the CII’s online data technical team who had assured her
that he would have a solution on or before 18 October 2013.
On 23 October 2013, Miss Parry sent an email to the Authority attaching a
fabricated document, which purported to be an SPS issued by the CII on 1 February
2013, which would remain valid until 31 January 2014, (the date by which Miss
Parry was required to renew her CII membership). She also stated that she was not
convinced that the CII’s online system had been rectified as she was unable to
access her on-line account.
On 21 May 2014, the Authority sent an email to Miss Parry requesting that she
verify that she had obtained the appropriate qualifications required under the TC.
On 12 June 2014 and 30 July 2014, Miss Parry sent the Authority a second
fabricated document. This purported to be an SPS issued by the CII on 1 February
2014, which would remain valid until 31 January 2015.
The Authority decided at that time to take no further action on the matter, because
the Authority had not at that stage identified that the SPSs Miss Parry had provided
Notwithstanding what Miss Parry told the Authority, however, Miss Parry was not
eligible for an SPS, and did not apply to the CII for one, because, having taken and
failed the relevant examinations on more than one occasion, Miss Parry had not
obtained the necessary qualifications.
On 25 June 2015, following enquiries by the Authority about the validity of Miss
Parry’s qualifications, the CII informed the Authority that it had no record of Miss
Parry applying for, or being issued with, an SPS. The CII also informed the
Authority that Miss Parry had not obtained the necessary Level 4 QCF qualification
in order to provide retail investment advice.
On 3 September 2015, the Authority telephoned Miss Parry to discuss the
discrepancy between the CII’s records relating to the SPSs and statements Miss
Parry had provided to the Authority, in relation to her qualifications. During the
telephone conversation, Miss Parry stated that the CII had sent her manual SPSs
because of issues it was having with its systems relating to her name change and
that the CII’s records were incorrect. Miss Parry also stated that it ‘simply was not
true’ that the CII had not issued her with an SPS and that she had records to prove
Miss Parry’s conduct
On 12 November 2015, the Authority conducted a compelled interview with Miss
Parry using its statutory powers. During the interview, Miss Parry said that:
a. contrary to what she had previously told the Authority, she did not possess
the appropriate qualifications to provide retail investment advice, and that
she had never applied to the CII for an SPS;
b. she had fabricated the two SPSs she had provided to the Authority by
editing a template version of a CII SPS which she had found on the
internet, in order to mislead the Authority into believing she had attained
the necessary qualifications to be deemed competent to provide retail
investment advice; and
c. she understood that her conduct was dishonest, and had continued
conducting retail investment business despite knowing that she did not
have the requisite qualifications.
The statutory and regulatory provisions relevant to this Final Notice are set out in
Failing to act with integrity in carrying out controlled functions: Statement of Principle 1
During the relevant period, Miss Parry, whilst approved to perform the CF30
Customer function acted in breach of Statement of Principle 1 by failing to act with
integrity, in that she dishonestly fabricated two SPSs and made numerous false
statements to the Authority, in order to mislead the Authority into believing that
she had obtained the appropriate qualifications to provide investment advice to
retail customers, when she had not.
Not fit and proper
By reason of the facts and matters described above, the Authority considers that
Miss Parry lacks honesty and integrity and, therefore, is not a fit and proper
Given Miss Parry’s breaches of Statement of Principle 1, the Authority has imposed
a penalty on her pursuant to section 66 of the Act. The Authority’s policy on the
imposition of a financial penalty is set out in Chapter 6 of DEPP. In determining the
financial penalty, the Authority has had regard to that guidance.
Changes to DEPP were introduced on 6 March 2010. Given that Miss Parry’s
breaches occurred after that date, the Authority has had regard to the provisions in
force after that date.
The application of the Authority’s penalty policy is set out in Annex A to this Final
Notice in relation to Miss Parry’s breaches of Principle 1 of the Statements of
In determining the financial penalty to be attributed to Miss Parry’s breaches, the
Authority has had particular regard to the following matters as applicable:
the need for credible deterrence;
the nature, seriousness and impact of the breach;
the aggravating factors relating to the breach;
the settlement discount for agreeing to settle at an early stage of the
Authority’s investigation; and
serious financial hardship.
The penalty calculation in relation to Miss Parry is set out in Annex B to this Final
Notice. Having regard to all the circumstances, the Authority considers that
£109,400 (inclusive of interest) is the appropriate financial penalty to impose on
The Authority considers that Miss Parry is not a fit and proper person as she lacks
honesty and integrity, and poses a serious risk to consumers and to confidence in
the financial system. Consequently, the Authority considers it appropriate to
prohibit Miss Parry from performing any function in relation to any regulated
activity carried on by any authorised person, exempt person or exempt professional
The decision which gave rise to the obligation to give this Final Notice was made by
the Settlement Decision Makers.
This Final Notice is given under, and in accordance with, section 390(1) of the Act.
Manner of and time for payment
The financial penalty must be paid by Miss Parry to the Authority by 15 September
If the financial penalty is not paid
If the payment is outstanding by 15 September 2016, the Authority may recover
the outstanding amount as a debt owed by Miss Parry and due to the Authority.
The Authority must publish such information about the matter to which this Final
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 Miss Parry or prejudicial to the interest of consumers.
The Authority intends to publish this Final Notice and such information about the
matter to which this Final Notice relates as it considers appropriate.
For more information concerning this matter generally, Miss Parry should contact
Donovan Thorpe-Davis at the Authority (direct line: 020 7066 8678).
Enforcement and Market Oversight Division
RELEVANT STATUTORY PROVISIONS
The Authority’s operational objectives established in section 1B of the Act include
protecting and enhancing the integrity of the UK financial system and the
protection of consumers.
The Authority has the power, pursuant to section 56 of the Act, to make a
prohibition order against an individual prohibiting that individual from performing a
specified function, any function falling within a specified description, or any
function, if it appears to the Authority that the individual is not a fit and proper
person to perform functions in relation to a regulated activity carried on by an
Section 66 of the Act provides that the Authority may take action against a person
if it appears to the Authority that the person is guilty of misconduct and the
Authority is satisfied that it is appropriate in all the circumstances to take action
against him / her. Misconduct includes failure, while an approved person, to comply
with a Statement of Principle issued under section 64 of the Act. The action that
may be taken by the Authority pursuant to section 66 of the Act includes the
imposition of a penalty on the approved person of such amount as it considers
RELEVANT HANDBOOK PROVISIONS
Fit and Proper Test for Approved Persons (FIT)
FIT sets out the criteria for assessing the fitness and propriety of a candidate for a
controlled function. FIT is also relevant in assessing the continuing fitness and
propriety of an approved person.
FIT 1.3 provides that the Authority will have regard to a number of factors when
assessing the fitness and propriety of a person. The most important considerations
will be the person’s honesty, integrity and reputation, competence and capability,
and financial soundness.
FIT 2.1.1G provides that in determining a person’s honesty and integrity, the
Authority will have regard to all relevant matters including, but not limited to,
those set out in FIT 2.1.3G, which includes whether the person has contravened
any of the requirements or standards of the regulatory system (FIT 2.1.3G(5)).
Statements of Principle and Code of Practice for Approved Persons (APER)
APER sets out the fundamental obligations of approved persons and sets out
descriptions of conduct, which, in the opinion of the Authority, does not comply
with the relevant Statements of Principle. It also sets out, in certain cases, factors
to be taken into account in determining whether an approved person’s conduct
complies with a Statement of Principle.
APER 2.1.2P, which applied from 1 December 2001 to 31 March 2013, set out
Statement of Principle 1 which stated that an approved person must act with
integrity in carrying out his controlled function.
APER 2.1A.3P, which applies from 1 April 2013, sets out Statement of Principle 1
which states that an approved person must act with integrity in carrying out his
APER 3.1.3G provides that, when establishing compliance with, or a breach of, a
Statement of Principle, account will be taken of the context in which a course of
conduct was undertaken, including the precise circumstances of the individual case,
the characteristics of the particular controlled function and the behaviour expected
in that function.
APER 3.1.4G provides that an approved person will only be in breach of a
Statement of Principle if they are personally culpable, that is, where their conduct
was deliberate or where their standard of conduct was below that which would be
reasonable in all the circumstances.
APER 4.1.4G sets out examples of behaviour which the Authority considers does
not comply with Statement of Principle 1. An example of such conduct is falsifying
documents (APER 4.1.4G(1)) and providing false and misleading information to the
Authority (APER 4.1.4G(11)).
OTHER RELEVANT REGULATORY PROVISIONS
The Authority’s policy on the imposition of financial penalties
The Authority's policy in relation to the imposition of financial penalties is set out in
Chapter 6 of DEPP (the penalty analysis in relation to Miss Parry is located at Annex
DEPP 6.5B sets out the five steps for the calculation of financial penalties to be
imposed on individuals in non-market abuse cases.
DEPP 6.5D sets out the Authority’s approach to serious financial hardship.
DEPP 6.5D.1 states that the Authority may consider whether a reduction in the
proposed penalty is appropriate if the penalty would cause the subject of the
enforcement action serious financial hardship.
DEPP 6.5D.1(2)(a) sets out that the Authority will only consider a reduction if the
individual provides verifiable evidence that payment of the penalty will cause them
serious financial hardship.
DEPP 6.5D.2(1) states that the Authority would consider an individual’s ability to
pay the penalty over a reasonable period. The Authority’s starting point is that an
individual will suffer serious financial hardship only if during that period his net
annual income will fall below £14,000 and his capital will fall below £16,000 as a
result of payment of the penalty.
DEPP 6.5D.2(7) states that there are cases where, even if the individual has
satisfied the Authority that payment of the financial penalty would cause serious
financial hardship, the Authority considers the breach to be so serious that it is not
appropriate to reduce the penalty. An example of such conduct is where the
individual has directly derived a financial benefit from the breach (DEPP 6.5D.2
(7)(a)), where the individual has acted dishonestly with a view to personal gain
(DEPP 6.5D.2(7)(b)) and where there has been previous Authority action in respect
of similar breaches (DEPP 6.5D.2(7)(c)).
The Authority’s policy for exercising its power to make prohibition orders
The Authority’s approach to exercising its power to make prohibition orders is set
out in Chapter 9 of EG.
EG 9.1.1 states that the Authority may exercise the power to make a prohibition
order where it considers that, to achieve any of the Authority’s statutory objectives,
it is appropriate either to prevent an individual from performing any functions in
relation to regulated activities, or to restrict the functions which he may perform.
EG 9.7.1 provides that in appropriate cases the Authority may take other action
against an individual in addition to making a prohibition order and/or withdrawing
approval, including the use of its power to impose a financial penalty.
The Authority’s policy for imposing a financial penalty is set out in Chapter 6 of
DEPP. In determining the financial penalty, the Authority has had regard to that
Changes to DEPP were introduced on 6 March 2010. Given that Miss Parry’s
breaches occurred after that date, the Authority has had regard to the provisions
of DEPP in force after that date.
The application of the Authority’s penalty policy is set out below in relation to Miss
Parry’s breaches of Statement of Principle 1 on or after 6 March 2010.
Breaches of Principle 1 of the Statements of Principle on or after 6 March 2010
In respect of any breach occurring on or after 6 March 2010, the Authority applies
a five-step framework to determine the appropriate level of financial penalty.
DEPP 6.5 sets out the details of the five-step framework to determine the
appropriate level of financial penalty. DEPP 6.5B sets out the details of the five-
step framework that applies in respect of financial penalties imposed on
individuals in non-market abuse cases.
The Authority considers that Miss Parry should not be allowed to retain the
financial benefit she derived directly from her misconduct, pursuant to DEPP
6.5B.1G. The Authority has calculated that, during the Relevant Period, Miss
Parry’s direct financial benefit from her breaches was £83,119 being the money
Miss Parry received for advice which she was not qualified to give.
The Authority will ordinarily also charge interest on the benefit derived directly
from misconduct. Adding interest at an annual rate of 8% results in a Step 1
figure of £109,418 (rounded to the nearest £1).
Step 2: Seriousness of the breach
At Step 2, the Authority determines the figure that reflects the seriousness of the
breach (DEPP 6.5B.2G). The Authority will determine a figure which will be based
on a percentage of the individual’s “relevant income”. The relevant income will be
the gross amount of all benefits received by the individual from the employment
in connection with which the breach occurred during the relevant period.
The Authority considers Miss Parry’s relevant income for the Relevant Period to
have been £168,811.
In deciding on the percentage of relevant income that forms the basis of the Step
2 figure, the Authority considers the seriousness of the breach and chooses a
percentage between 0% and 40%. This range is divided into five fixed levels
which represent, on a sliding scale, the seriousness of the breach; the more
serious the breach, the higher the level. For penalties imposed on individuals in
non-market abuse cases there are the following five levels:
Level 1 – 0%
Level 2 – 10%
Level 3 – 20%
Level 4 – 30%
Level 5 – 40%
In assessing the seriousness level, the Authority takes into account various
factors which reflect the impact and nature of the breach, and whether it was
committed deliberately or recklessly. The Authority considers that the following
factors are relevant.
Impact of the breach
Miss Parry derived a direct financial benefit of £83,119 as a result of the
In providing retail investment advice to 57 clients after 31 December 2012
without the appropriate qualifications, there was a significant risk that Miss
Parry’s advice would have been unsuitable, which could have caused those clients
significant financial loss.
Nature of the breach
Miss Parry failed to act with honesty and integrity during the Relevant Period. She
misled the FCA on numerous separate occasions over the course of the Relevant
Period which compounded the dishonesty making it more serious.
Whether the breach was deliberate or reckless
Miss Parry has admitted she knew that she did not have the appropriate
qualifications to provide retail investment advice. She also admitted that she had
acted dishonestly during the Relevant Period, in that she fabricated two SPS
documents and provided numerous inaccurate statements to the Authority with
the intention of misleading the Authority about her suitability to provide retail
investment advice to customers. Her actions were therefore deliberate. The
breaches were also intentional in that Miss Parry foresaw the consequences of her
Taking all of these factors into account, the Authority considers the seriousness of
Miss Parry’s breaches of Principle 1 of the Statements of Principle to be level 5
and so the Step 2 figure is 40% of £168,811, which is £67,254 (rounded down to
the nearest £1.
Step 3: Mitigating and aggravating factors
At Step 3, the Authority may increase or decrease the amount of the financial
penalty arrived at after Step 2, but not including any amount to be disgorged in
accordance with Step 1, to take into account factors which aggravate or mitigate
the breach (DEPP 6.5B.3G).
The Authority considers that Miss Parry’s failure to take account of the following
communications issued by it aggravate the breach:
a. the numerous communications and guidance to retail investment firms
concerning the RDR, stating that from 31 December 2012, retail
investment advisers would be required to obtain an annual SPS in order to
demonstrate the higher standard of professionalism; and
b. a Final Notice issued to Ewan King for fabricating two SPSs, which is
directly applicable to Miss Parry’s conduct and which was published on 30
The Authority considers this factor to justify an increase in the penalty of 10%.
Therefore the Step 3 figure is £74,276 (rounded down to the nearest £1).
Step 4: Adjustment for deterrence
If the Authority considers that the figure arrived at after Step 3 is insufficient to
deter the individual who committed the breach, or others, from committing
further or similar breaches, then the Authority may increase the penalty (DEPP
The Authority considers that the penalty is sufficient for the purposes of credible
deterrence. Therefore, after including disgorgement of £83,119, the penalty figure
at Step 4 is £157,300 (rounded to the nearest £100).
Step 5: Settlement discount
DEPP 6.7 provides that the amount of the financial penalty which might otherwise
have been payable will be reduced to reflect the stage at which the Authority and
Miss Parry reached agreement.
The Authority and Miss Parry reached agreement at Stage 1 so a 30% discount
applies to the Step 4 figure (excluding the disgorgement element).
Therefore, the Step 4 figure after the settlement discount is £135,100 (rounded
down to the nearest £100) (£83,119 plus £51,993) (70% of £74,276).
Taking account of the figure at Step 1, the total financial penalty is £135,100
(after Stage 1 discount) (£157,300 before Stage 1 discount).
Serious financial hardship
Pursuant to DEPP 6.5D.1G, the Authority may reduce the proposed penalty if
appropriate, if the penalty would cause the individual serious financial hardship.
DEPP 6.5D.2G(7) provides that there may be cases where, even though the
individual has satisfied the Authority that payment of the financial penalty would
cause him serious financial hardship, the Authority considers the breach to be so
serious that it is not appropriate to reduce the penalty. The Authority will consider
all the circumstances of the case in determining whether this course of action is
appropriate, including whether the individual directly derived a financial benefit
from the breach and, if so, the extent of that financial benefit, and whether the
individual acted fraudulently or dishonestly with a view to personal gain.
Information provided by Miss Parry indicates that she has capital assets of less
than £16,000 and she is receiving minimal income.
However, Miss Parry acted dishonestly, she directly benefited from the breaches
which, in turn, provided her with an income. Although as far as we are aware Miss
Parry’s misconduct did not cause loss to consumers, there was a risk of loss to all
of the 57 consumers she provided retail investment advice to during the Relevant
Period. It would be appropriate to reduce the punitive element of the proposed
penalty imposed on Miss Parry to £0 (zero) for serious financial hardship reasons.
However, Miss Parry’s misconduct is considered to be at level 5 on the scale of
seriousness, and the Authority considers that the breaches are sufficiently serious
that it is not appropriate to reduce the penalty in respect of the disgorgement
element of the proposed financial penalty on the basis of financial hardship,
despite Miss Parry’s limited financial position.
The Authority considers that £109,400 (rounded down to the nearest £100) is an
appropriate financial penalty to impose on Miss Parry, relating to Miss Parry’s
breaches of Principle 1 of the Statements of Principle under the new penalty