First Supervisory Notice to London Court Limited
What has happened?
In October 2023, the FCA issued a First Supervisory Notice imposing certain requirements on London Court Limited with immediate effect.
What are the key points of the FSN?
The FSN issued requires that London Court must not, without the FCA’s prior written consent, undertake any regulated activity or any other activity ancillary to that regulated activity. This ban includes offering any new investments on its “My Investment Hub” platform or any other investment platform, undertaking bond administration or ISA Manager responsibilities in respect of any new investments and facilitating any new funds being invested into existing investments listed on the platform, whether those funds originate from new or existing investors.The FCA has expressed serious concerns that London Court does not have appropriate systems and controls in place, as required by the FCA’s Product Governance (PROD) rules, to determine the target market for investments offered on its platform, to assess the compatibility of the investments offered with the needs of the clients to whom they are distributed, or to ensure that it is in the best interests of London Court’s clients to distribute investments to them.
London Court did not undertake any due diligence in connection with investments it offered on its platform and it confirmed this in a letter dated 21 March 2023. In the FCA’s view, for London Court to comply with its obligations, it should carry out due diligence on investments it offers on its platform to ensure it understands the investments that it is distributing, is able to assess the compatibility of the investments with the needs of its clients and will only distribute investments where this is in the best interests of the client.
London Court also presented materials to investors about investment opportunities where there was a significant risk that those materials were insufficient for an investor to make an informed decision whether to purchase the investment, were inaccurate, and/or were potentially misleading.
These issues are similar to concerns raised previously with London Court regarding its approach to communicating and approving financial promotions, which form the basis of the requirements in force on the firm’s Part 4A permissions since December 2019. London Court does not, in the FCA’s view, appear to have reflected the feedback from the FCA’s engagement with the firm in 2019 in its current operations.
In the FCA’s view, London Court does not have appropriate resources, and the regulator is concerned that its non-financial resources may not be sufficient to enable it to understand or comply with its obligations under the regulatory system.
How can we help?
Thistle Initiatives has supported firms for over 10 years as a trusted compliance and regulatory advisor. In addition to assisting you as-and-when, our team of specialists can serve as your right hand in meeting and complying with FCA regulations. We understand the importance of staying up-to-date and compliant and are dedicated to providing the guidance and support needed to do so.
Are you looking for help with your product governance or financial promotion arrangements, or more general regulatory questions? Contact our specialist team now to schedule a free consultation. Get in touch with us by calling 020 7436 0630 or sending an email to info@thistleinitiatives.co.uk.