FINAL NOTICE

To:

Fleetwood and District Credit Union Limited

ACTION

1.
For the reasons set out in this Final Notice, the Authority hereby takes the
following action against FDCUL.

2.
The Authority issued to FDCUL the Decision Notice which notified FDCUL that, for
the reasons given below and pursuant to section 55J of the Act, the Authority had
decided to cancel FDCUL’s Part 4A permission.

3.
FDCUL has not referred the matter to the Tribunal within 28 days of the date on
which the Decision Notice was given to FDCUL.

4.
Accordingly, the Authority has today cancelled FDCUL’s Part 4A permission.

Fleetwood and District Credit Union Limited

22 August 2017

DEFINITIONS

5.
The definitions below are used in this Final Notice (and in the Annex):

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

“the Authority” means the Financial Conduct Authority;

“the Decision Notice” means the Decision Notice given by the Authority to FDCUL
dated 29 June 2017;

“EG” means the Enforcement Guide;

“FDCUL” means Fleetwood and District Credit Union Limited;

“FDCUL’s Part 4A permission” means the permission granted by the Authority to
FDCUL pursuant to Part 4A of the Act;



“the FSCS” means the Financial Services Compensation Scheme ;

“the Handbook” means the Authority’s Handbook of rules and guidance;

“the PRA” means the Prudential Regulation Authority;

“the Principles” means the Authority’s Principles for Businesses;

“the suitability Threshold Condition” means the threshold condition set out in
paragraph 3D of Schedule 6 to the Act;


“SUP” means the section of the Handbook entitled ‘Supervision Manual’;

“the Threshold Conditions” means the threshold conditions set out in Schedule 6
to the Act;



“the Tribunal” means the Upper Tribunal (Tax and Chancery Chamber); and

“the Warning Notice” means the Warning Notice given by the Authority to FDCUL
dated 7 June 2017.

RELEVANT STATUTORY PROVISIONS

6.
The statutory and regulatory provisions relevant to this Final Notice are set out in
the Annex.

FACTS AND MATTERS RELIED ON

7.
FDCUL became regulated by the Authority on 2 July 2002 and also by the PRA on
1 April 2013.


8.
On 26 May 2007, FDCUL’s permission was made subject to a requirement that
FDCUL could not engage in its only regulated activity of accepting deposits. On 12
June 2007, the FSCS declared FDCUL “in default” and FDCUL’s depositors were
compensated by the FSCS for their savings. Since 26 May 2007 to date, FDCUL
has continued to be authorised and to hold a Part 4A permission.


9.
Correspondence sent by the Authority on 13 April 2017 and 25 April 2017 to the
postal address last notified by FDCUL to the Authority as FDCUL’s principal place

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22 August 2017

of business was returned to the Authority marked “addressee gone away”, and
“addressee unknown” respectively. The Authority sent a further letter to this
address on 27 April 2017 which was returned to the Authority marked “not called
for”.


10.
The Authority attempted to contact FDCUL on 25 April 2017 on a telephone
number the Authority found for FDCUL using an internet search. The Authority
was unable to connect the call.


11.
The Authority sent a letter on 25 April 2017 to a postal address found for FDCUL
using an internet search. On 26 April, the Authority received a voicemail from an
individual who informed the Authority that this address is not associated with
FDCUL.


12.
Accordingly, it appears to the Authority that FDCUL has failed to notify the
Authority of a change in the address of its principal place of business.

FAILINGS

13.
The Authority has concluded, on the basis of the facts and matters described
above, that FDCUL:

a.
has failed to notify the Authority of a change in the address of its principal
place of business, contrary to SUP 15.5.4R(1);

b.
has failed to deal openly and co-operatively with the Authority, in breach
of Principle 11 (Relations with regulators) of the Principles (by not
providing an up-to-date address for its principal place of business);

c.
has not demonstrated that it is ready, willing and organised to comply with
the requirements and standards under the regulatory system, namely the
requirement in SUP 15.5.4R(1) to give the Authority reasonable advance
notice of a change in the firm’s principal place of business and the date of
the change;

d.
has therefore failed to satisfy the Authority that it is a fit and proper
person, having regard to the operational objectives of the Authority; and

e.
is therefore failing to satisfy the suitability Threshold Condition,

and accordingly, FDCUL’s Part 4A permission should be cancelled.

DECISION MAKER

14.
The decision which gave rise to the obligation to give this Final Notice was made
by the Regulatory Decisions Committee.

IMPORTANT

15.
This Final Notice is given to FDCUL in accordance with section 390(1) of the Act.

16.
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

Fleetwood and District Credit Union Limited

22 August 2017

Authority may not publish information if such publication would, in the opinion of
the Authority, be unfair to FDCUL or prejudicial to the interest of consumers.

17.
The Authority intends to publish this Final Notice and such information about the
matter to which this Final Notice relates as it considers appropriate.

18.
For more information concerning this matter generally, FDCUL should contact
Sheena Baldev at the Authority (direct line: 020 7066 6760).

John Kirby
Enforcement and Market Oversight Division

Fleetwood and District Credit Union Limited

22 August 2017

RELEVANT STATUTORY PROVISIONS

1.
The Authority’s operational objectives established in section 1B of the Act include
protecting and enhancing the integrity of the UK financial system and securing an
appropriate degree of protection for consumers.

2.
The Authority is authorised by section 55J of the Act to cancel an authorised
person’s Part 4A permission, where it appears to the Authority that such a person
is failing to satisfy the Threshold Conditions.

3.
The suitability Threshold Condition provides, in relation to a person (“B”) carrying
on or seeking to carry on regulated activities which consist of or include a PRA-
regulated activity, that:

“(1)
B must be a fit and proper person, having regard to the operational
objectives of the [Authority].

(2)
The matters which are relevant in determining whether B satisfies the
conditions in sub-paragraph (1) include-

(d)
whether B has complied and is complying with requirements
imposed by the [Authority] in the exercise of its functions, or
requests made by the [Authority], relating to the provision of
information to the [Authority] and, where B has so complied or is so
complying, the manner of that compliance;

[…].”

RELEVANT HANDBOOK PROVISIONS

4.
In exercising its power to cancel a firm’s Part 4A permission, the Authority must
have regard to the regulatory requirements and guidance published in the
Handbook and in regulatory guides, such as EG. The relevant main considerations
in relation to the action specified above are set out below.

Relevant Principle

5.
Principle 11 requires a firm to deal with its regulators in an open and co-operative
way, and to disclose to the Authority appropriately anything relating to the firm of
which the Authority would reasonably expect notice.

Relevant Rule

6.
SUP 15.5.4R requires that:

“A firm must give the [Authority] reasonable advance notice of a change in any of
the following addresses, and give details of the new address and the date of the
change:

(1)
the firm’s principal place of business in the United Kingdom;

Fleetwood and District Credit Union Limited

22 August 2017

Guidance concerning the suitability Threshold Condition

7.
Guidance on the suitability Threshold Condition is set out in COND.

COND 2.5 – Suitability: Paragraph 3D of Schedule 6 to the Act

8.
COND 2.5.1CUK reproduces the relevant statutory provision that a person
concerned must be a fit and proper person having regard to the operational
objectives of the FCA, including, amongst other things, the need to ensure that it
has complied and is complying with requirements imposed by the Authority in the
exercise of its functions.

9.
COND 2.5.2G states that the Authority will take into consideration anything that
could influence a firm’s continuing ability to satisfy the suitability Threshold
Condition.

10.
COND 2.5.6G gives 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, the suitability Threshold Condition, including whether:


the firm has been open and co-operative in all its dealings with the Authority
and is ready, willing and organised to comply with the requirements and
standards under the regulatory system (COND 2.5.6G(1));



the firm has contravened, amongst other things, the provisions of the
regulatory system, which include the Principles and other rules (COND
2.5.6G(4)).


OTHER RELEVANT REGULATORY PROVISIONS

11.
The Authority’s policy in relation to its enforcement powers is set out in EG,
certain provisions of which are summarised below.

Cancelling a firm’s Part 4A permission on the Authority’s own initiative

12.
EG 8.1.1(1) provides that the Authority may use its own initiative power to vary
or cancel the permission of an authorised person under section 55J of the Act,
where the person is failing or is likely to fail to satisfy the Threshold Conditions
for which the Authority is responsible.

13.
EG 8.5.1(1) states that the Authority will consider cancelling a firm’s Part 4A
permission using its own initiative power contained in section 55J of the Act in
circumstances where the Authority has very serious concerns about the firm, or
the way its business is or has been conducted.

14.
EG 8.5.2 provides examples of the types of circumstances in which the Authority
may cancel a firm’s Part 4A permission. One such example is the failure to
provide the Authority with valid contact details or failure to maintain the details
provided, such that the Authority is unable to communicate with the firm (EG
8.5.2(6)).