Financial Conduct Authority
FCA refuses authorisation to regulatory consultancy firm Alexander Jon Compliance Consulting Limited
The Financial Conduct Authority (FCA) has refused to authorise Alexander Jon Compliance Consulting Limited (AJCC) to provide regulatory hosting services.
This is a service which would have allowed AJCC to take responsibility for firms carrying out regulated activities without being directly FCA approved, known as Appointed Representatives (ARs).
AJCC could not demonstrate that it had the skills, experience or the staff to oversee ARs. It was unable to describe a viable or sustainable business model. AJCC was also unable to explain how its ARs would assess that products or services were appropriate for consumers, or to demonstrate that it would have direct responsibility for the conduct and compliance of its ARs.
The FCA refused the application to protect consumers from the risk of using a poorly overseen investment business.
The FCA is also reminding those providing regulatory hosting services that they are accountable for the actions of their ARs and need to have the ability and skill to properly supervise them. The FCA has previously highlighted common issues with oversight of ARs and committed to improving the standards in this sector as part of its 2022-2025 Strategy.
Emily Shepperd, Executive Director of Authorisations at the FCA, recently said:
“It is vital those who are seeking the FCA’s authorisation meet our high standards. If this is not the case, we will refuse their applications in the interests of consumers and other businesses.”
Notes to Editors
- The Final Notice for AJCC.
- The FCA changed the way certain decisions would be made in Policy Statement PS21/16, which took effect from 26 November 2021. AJCC’s application entered the decision-making process before those changes came into force, so the decision to refuse AJCC’s application was taken by the RDC.
- An AR is a firm or person who carries on a regulated activity on behalf, and under the responsibility of, a firm authorised by the FCA (the principal). In appointing an AR, the principal assumes responsibility for the regulated activities the AR carries out.
- The 'regulatory hosting' model is a use of the AR regime where, rather than carrying on any substantive element of a regulated activity itself, the regulated business of the authorised firm, i.e. the principal, makes its permissions available for use by its ARs. These types of principal often have many AR relationships, and this service to the ARs is commonly marketed as an additional service alongside other compliance support services.
- Our 2022-2015 Strategy committed to improvements in the oversight of ARs.
- Our consultation on Improving the Appointed Representatives regime highlighted common issues with ARs which we are seeking to tackle.
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