FINAL NOTICE

ACTION

1.
By an application dated 24 November 2017 (“the Application”), One Stop Financial
Services Limited (“the Firm”) applied under section 55A of the Act for permission
under Part 4A of the Financial Services and Markets Act 2000 (“the Act”) to carry
on the regulated activities of;

a.
Advising customers on non-investment insurance contracts;

b.
Arranging (bringing about) deals in non-investment insurance Contracts;

c.
Making arrangements with a view to transactions in non-investment
insurance contracts, and

d.
Agreeing to carry on a regulated activity.

2.
The Application is incomplete as the Firm has failed to provide the information
required by the Authority for the purposes of determining the Application pursuant
to section 55V of the Act.

3.
For the reasons listed below, the Authority has decided to refuse the Application.

SUMMARY OF REASONS

4. By its Warning Notice the Authority gave notice that it proposed to refuse the

Application and that OneStop Financial Services Limited was entitled to make
representations to the Authority about that proposed action.

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

Services Limited 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 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 the Authority gave One Stop Financial Services Ltd notice

that it had decided to take the action described above.

7. One Stop Financial Services 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
the period of time or to date.

8. During the course of the Application, the Firm has not provided information

requested by the Authority which the Authority considers necessary for the
purposes of determining the Application, and has not demonstrated the level of co-
operation that is expected of a regulated firm.

9. As a result of the lack of engagement by the Firm, the Authority contacted the Firm

on three separate occasions over an 8 week period to request the outstanding
information; each request included a statement to the effect that the recipient must
contact the Authority or face a Warning Notice. The Firm has failed to respond to
those requests.

10. The Authority must therefore determine the Application based upon the information

received to date, in circumstances where its requests for information have not been
met.

11. Having reviewed that information, the Authority cannot ensure that the Firm will

satisfy, and will continue to satisfy, in relation to the regulated activities for which
permission is sought, the threshold conditions set out in Schedule 6 to the Act.

12. Authorised firms (and those seeking authorisation) are expected to engage with

the Authority in an open and co-operative way. The failure to provide the requested
information raises concerns that the Firm would not do so if the Application were
to be granted.

13. In relation to the effective supervision threshold condition (in paragraph 2C of

Schedule 6 to the Act), the Authority is not satisfied that the Firm is capable of
being effectively supervised by the Authority having regard to all the
circumstances.

14. In relation to the appropriate resources threshold condition (in paragraph 2D of

Schedule 6 of the Act), the Authority is not satisfied that the Firm has appropriate
human resources in relation to the regulated activities it seeks to carry on.

15. In relation to the suitability threshold condition (in paragraph 2E of Schedule 6 to

the Act), the Authority is not satisfied that the Firm will conduct its business with
integrity and in compliance with proper standards.

DEFINITIONS

16. The definitions below are used in this Decision Notice.

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

“the Application” means the application referred to in paragraph 1 above.

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

“the Decision Notice” means the decision notice dated 02 October 2018 given to
the applicant by the Authority.

“the Tribunal” means the Upper Tribunal (Tax & Chancery Chamber)

“the Warning Notice” means the warning notice dated 24 August 2018 given to the
applicant by the Authority.

FACTS AND MATTERS

The Application

17. The Application was received by the Authority on 24 November 2017.

18. The Application was made under section 55A of the Act for permission under Part

4A of the Financial Services and Markets Act 2000 (“the Act”) to carry on the
regulated activities of;

a) Advising customers on non-investment insurance contracts;

b) Arranging (bringing about) deals in non-investment insurance Contracts;

c) Making arrangements with a view to transactions in non-investment insurance

contracts, and

d) Agreeing to carry on a regulated activity.



19. As part of the Application, the Firm applied for the Firm’s Director to be an Approved

Person, to perform the role of CF1 (the Director function). The Firm’s Director is
the sole Director and 100% shareholder of the Firm.

Chronology of relevant correspondence with the Firm

20. Following receipt of the Application on 24 November 2017, the Authority undertook

a review of the Application. As a result of the review, it determined that certain
information was outstanding or required clarification.

21. On 7 February 2018 the Authority contacted the Firm by email to request;

a. Details of the Firm’s locum;

b. Confirmation as to whether the Firm would be using a subordinated loan;

c. A P.I. quote;

d. Confirmation as to how the firm would restore operations without disruption

to clients in the event that the Firm lost their office; and

e. Confirmation as to the appropriate referee to contact at the Director’s

previous firm (“Firm X”).

22. On 22 February 2018 the Firm provided the locum details, confirmation that the

DBS request had been completed, the application file for the PI quote, confirmation
that £5,000 had been deposited into the Firm, attached the PI cover issued on 20
February 2018, and stated that the Firm’s data would be held off-site in cloud
storage.

23. On 22 February 2018 the Authority responded to request a bank statement showing

the £5,000 deposit, confirmation of a subordinated loan or of fully paid up share
capital, completion of the email from the Firm’s compliance consultant regarding
disaster recovery, the name of the Director’s referee at their previous firm, and the
office they worked in, their job title, who they reported to and the types of policies
they dealt with.

24. On 23 February 2018 the Firm responded to provide details of the cloud storage

provider, and stated that they would be meeting the subordinated loan and the
deposit of £5,000 had been credited into the account. The email stated that the
Director had worked for an agency firm which contracted/worked alongside Firm X,
dealing with non-investment life insurance protection. It provided the contact
details of an individual for that agency firm.

25. On 27 February 2018 the Authority noted that the Firm had not answered the

Authority’s previous questions fully. It requested a copy of the subordinated loan
form, a bank statement showing the deposit of £5,000, confirmation of the office,
job title and line manager, in relation to the Director’s work at Firm X (via the
agency firm), confirmation as to whether non-investment life insurance products
were the only type the Director dealt with in that role, and details of the cloud
storage arrangements and due diligence checks.

26. On 6 March 2018 the Firm provided the subordinated loan form, a bank statement,

and stated that the Director dealt with non-investment life insurance and income
protection at the address of the agency firm, which was working alongside Firm X.
Details of a different cloud storage provider were given, without any details of due
diligence checks.

27. On 7 March 2018 the Authority requested the Director’s most recent payslips, P45,

and most recent P60 from the Agency firm, bank statements showing their salary
being credited, and confirmation as to their involvement with Firm X. The Authority
enquired as to why the cloud storage provider had changed, and sought details of
the gap analysis and the Service Level Agreement.

28. On 13 March 2018 the Director confirmed that he had worked at the agency firm

with a director and two other employees selling non-investment insurance products
and he was not involved with Firm X.

29. On 13 March 2018 the Authority sought an explanation for the discrepancies

regarding the employment history information provided in the application, and a
response
to
the
outstanding
queries
regarding
the
cloud
storage

arrangements (the rationale for the change in the supplier, the due diligence which
had been undertaken to ensure that the contract agreements between the firm and
the supplier all meet/satisfy SYSC 8.1.6R; SUP 2.3.5 R and 2.3.7R, and a copy of
the gap analysis / risk assessment completed for the outsourcing arrangements,
copies of the contracts and gap analysis and Service Level Agreements.

30. On 19 March 2018 the Authority was advised by the Firm’s locum that they were

no longer prepared to act as locum for the Firm and the Authority requested
confirmation from the Firm of their new locum.

31. The Authority received no responses to its requests for information on 13 March

and 19 March.

32. As a result of the lack of engagement by the Firm, on 23 April 2018 the Authority

wrote to the Firm to inform it that a failure to provide the information requested
would result in the application being determined based upon the information
received to date and that this might result in a recommendation to the RTC that it
issue the Firm with a Warning Notice proposing to refuse the Application.

33. The letter requested details of the agreements for the disaster recovery plan, the

explanation for the discrepancy in the employment history provided, the exact
dates of employment at the agency firm, confirmation as to whether the work was
telephone based or in person, and confirmation as to which insurance company’s
policies were being sold. It also requested details of the new locum.

34. No response was received to this letter by the stated deadline of 8 May 2018.

35. On 17 May 2018 the Authority wrote to the Firm, noting the lack of a response to

its previous letter of 23 April 2018 and reiterating that a failure to provide the
outstanding information would result in the application being determined based
upon the information received to date. The letter again noted that a failure to reply
might result in a recommendation to the RTC that it issue the Firm with a Warning
Notice proposing to refuse the Application.

36. No response was received to this letter by the stated deadline of 1 June 2018

37. On 14 June 2018 the Authority wrote to the Firm, noting the lack of a response to

its previous letters of 23 April 2018 and 17 May 2018 and reiterating that a failure
to provide the outstanding information would result in the application being
determined based upon the information received to date. The letter again noted
that this might result in a recommendation to the RTC that it issue the Firm with a
Warning Notice proposing to refuse the application.

38. No response was received to this letter by the stated deadline of 28 June 2018.

IMPACT ON THRESHOLD CONDITIONS

39. The regulatory provisions relevant to this Final Notice are referred to in Annex A.

40. During the course of the Application, the Firm has not provided information

requested by the Authority which the Authority considers necessary for the
purposes of determining the Application, and has not demonstrated the level of co-
operation that is expected of a regulated firm.

41. As a result of the lack of engagement by the Firm, the Authority contacted the Firm

on three separate occasions over an 8 week period to request the outstanding
information; each request included a statement to the effect that the recipient must
contact the Authority or face a Warning Notice. The Firm has failed to respond to
those requests.

42. The Authority must therefore determine the Application based upon the information

received to date, in circumstances where its requests for information have not been
met.

43. Having reviewed that information, the Authority cannot ensure that the Firm will

satisfy, and will continue to satisfy, in relation to the regulated activities for which
permission is sought, the threshold conditions set out in Schedule 6 to the Act.

44. Authorised firms (and those seeking authorisation) are expected to engage with

the Authority in an open and co-operative way. The failure to provide the requested
information raises concerns that the Firm would not do so if the Application were
to be granted.

The effective supervision threshold condition (paragraph 2C of Schedule 6 to the
Act)

45. The effective supervision threshold condition requires that a firm must be capable

of being effectively supervised by the Authority having regard to all the
circumstances

46. When assessing whether a firm can be effectively supervised, the Authority

considers the likelihood that it will receive adequate information from the firm (in
a timely manner) to enable it to determine whether the firm is complying with the
requirements and standards under the regulatory system for which the Authority
is responsible. This includes consideration of whether the firm is ready, willing and
organised to comply with Principle 11 (Relations with regulators) and the rules in
SUP on the provision of information to the Authority.

47. In light of the matters set out in paragraphs 20 to 38 above, the Authority cannot

be satisfied that the Firm is capable of being effectively supervised by the Authority
and, therefore, cannot ensure that the Firm satisfies and continues to satisfy the
effective supervision threshold condition. In particular, the Authority is not satisfied
that the Firm will:

a. Respond fully and promptly to requests for information from the Authority; and

b. Engage constructively with the Authority to resolve issues and mitigate risks

without significant oversight and resource from the Authority.

The appropriate resources threshold condition (paragraph 2D of Schedule 6 to
the Act)

48. The appropriate resources threshold condition requires that a firm’s resources must

be appropriate in relation to the regulated activities conducted or proposed. COND
2.4.2G(2) provides that ‘resources’ includes financial and non-financial resources
(such as human resources), and means of managing its resources (such as effective
means by which to manage risks). In this context, the Authority will interpret
‘appropriate’ as meaning sufficient in terms of quantity, quality and availability.
Consideration will be given to whether a firm’s resources are sufficient to enable it
to comply with the requirements imposed or likely to be imposed on it in the course
of the exercise of the Authority’s functions.

49. The Firm’s Director is the sole Director. As a result of the lack of engagement with

the Authority, the Authority is not satisfied that the Firm has appropriate resources
in relation to the proposed regulated activities.

The suitability threshold condition (paragraph 2E of Schedule 6 to the Act)

50. The suitability threshold condition requires that, among other things, a firm must

be fit and proper having regard to all the circumstances, including whether it 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 it has so complied or is so complying,
the manner of that compliance.

51. The matters described in paragraphs 20 to 38 above raise concerns as to the

suitability of the Firm. In particular;

a) The Authority considers that the Firm has not been open and co-operative

in all its dealings with the Authority, and the Authority cannot be satisfied
that the Firm will conduct its business with integrity;


b) The Firm has not demonstrated that it is ready, willing and organised to

comply with the requirements and standards under the regulatory system;
and

c) The Authority is not satisfied that the Firm’s business will be managed in

such a way to ensure that its affairs will be conducted with due skill, care
and diligence.

52. The Authority is not satisfied that the Firm is fit and proper having regard to all the

circumstances, including the need to ensure that its affairs are conducted in an
appropriate manner. Accordingly, the Authority does not consider that it can ensure
that the Firm satisfies, and will continue to satisfy, the suitability threshold
condition.

IMPORTANT NOTICES

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

54. 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 a 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 suitability of the UK financial system.

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

Final Notice relates as it considers appropriate.

Authority contacts

56. For more information concerning this matter generally, contact Nozrul Ali, Manager,

Retail Intermediaries Department at the Authority (direct line: 020 7066 4792
/email: Nozrul.ali@fca.org.uk).

Vena Raffle
on behalf of the Regulatory Transactions Committee

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’s Handbook,
including the part titled Threshold Conditions (“COND”). The main considerations
in relation to the action specified are set out below.

5. 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.

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

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

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

8. COND 2.4.2G(2) states that the Authority will interpret the term 'appropriate' as

meaning sufficient in terms of quantity, quality and availability, and 'resources' as
including all financial resources (though only in the case of firms not carrying on,
or seeking to carry on, a PRA-regulated activity), non-financial resources and
means of managing its resources; for example, capital, provisions against liabilities,

holdings of or access to cash and other liquid assets, human resources and effective
means by which to manage risks.

Threshold Condition 2C: Effective Supervision

9. 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 rules in SUP on the
provision of information to the Authority).

Threshold condition 2D: Adequate Resources

10. COND 2.4.2G(2) states that the Authority will interpret the term 'appropriate' as

meaning sufficient in terms of quantity, quality and availability, and 'resources' as
including all financial resources (though only in the case of firms not carrying on,
or seeking to carry on, a PRA-regulated activity), non-financial resources and
means of managing its resources; for example, capital, provisions against liabilities,
holdings of or access to cash and other liquid assets, human resources and effective
means by which to manage risks.


11. COND 2.4.2G (3) states that high level systems and control requirements are in

SYSC. The Authority will consider whether the firm is ready, willing and organised
to comply with these and other applicable systems and controls requirements when
assessing if it has appropriate non-financial resources for the purpose of the
threshold conditions set out in threshold condition 2D.


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 2.5.4G(2)(c)G states that examples of the kind of general considerations to

which the Authority may have regard when assessing whether a firm will satisfy,
and continue to satisfy, threshold condition 2E include, but are not limited to,
whether the firm can demonstrate that it conducts, or will conduct, its business
with integrity and in compliance with proper standards.

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:

(1) the firm has been open and co-operative in all its dealings with the Authority

and any other regulatory body (see Principle 11 (Relations with regulators))
and is ready, willing and organised to comply with the requirements and
standards under the regulatory system (such as the detailed requirements of
SYSC and, in relation to a firm not carrying on, or seeking to carry on, a PRA-
regulated activity only, the Prudential Standards part of the Authority’s
Handbook) in addition to other legal, regulatory and professional obligations;
the relevant requirements and standards will depend on the circumstances of

each case, including the regulated activities which the firm has permission,
or is seeking permission, to carry on.