FINAL NOTICE

ACTION

1. By a variation of permission application dated 25 May 2021 (“the Application”),
Capital Investements Ltd (“CIL” or “the Applicant”) applied under section 55A of
the Act for Part 4A permission to carry on the regulated activities of:

a. Seeking out, referrals and identification of claims or potential claims
(personal injury claim; financial services or financial product claim; housing
disrepair claim; claim for a specified benefit; criminal injury claim;
employment related claim)

b. Advice, investigation or representation in relation to a financial services or
financial product claim

2. The Application is incomplete.

3. For the reasons listed below, the Authority has refused the Application.

SUMMARY OF REASONS

4. By its Warning Notice, the Authority gave notice that it proposed to refuse the
application and that CIS was entitled to make representations to the Authority
about that proposed action.

5. Authorised firms (and those seeking authorisation) are expected to engage with
the Authority in an open and cooperative way. The failure to provide the
requested information raises concerns that CIL would fail to do so if the
Application were to be granted.

6. The failure to provide the information raises concerns as to whether CIL:

a. can be effectively supervised by the Authority as required by threshold
condition 2C;

b. has appropriate human resources, given CIL’s failure to provide the
Authority with the requested information as required by threshold
condition 2D; and

c. will conduct its business with integrity and in compliance with proper
standards as required by threshold condition 2E.

DEFINITIONS

7. The definitions below are used in this Final 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 RDC” means the Authority’s Regulatory Decisions Committee;

“SUP” means the Supervision section of the Authority’s handbook;

“SYSC” means the Senior Management Arrangements, Systems and Controls
section of the Authority’s handbook; and

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

FACTS AND MATTERS

8. The Application was received by the Authority on 25 May 2021.

9. Further information was requested from CIL under section 55U(5) of the Act.

10. The Authority requested the following information in support of the Application:

a. 9 September 2021 introductory email sent from case officer Joanne
Grimes (Authorisations) to firm to confirm receipt of application and confirm
assigned case officer. No response was required.

b. 24 September 2021 initial Review of incomplete application sent with a
deadline for return by 5pm Friday 8 October 2021. The following
information was requested:

i. The customer journey.
ii. Description of how operational sectors and permissions applied for
will all function alongside each other.
iii. Explanation of the balance of caseload and timeframes.
iv. Staff structure and descriptions of roles and experience.

v. Confirmation of unregulated services.
vi. Projected income splits.
vii. Pre-contractual summary sheet that complies with CMCOB 4.2 and
considers the requirements of 4.3.
viii. Customer contract that complies with CMCOB 6.
ix. Staff training and development plan.
x. Prudential calculations that demonstrate compliance with CMCOB
7.2.7 also including the overhead requirement calculations at 7.2.8
and eligible capital at 7.3.
xi. Financial Information including an opening balance sheet, forecast
closing balance sheet, monthly profit and loss for 12 months plus
monthly cash flow forecast for 12 months.
xii. Any approval of unregulated third-party financial promotions
intended?

c.12 October 2021 a call was made to the firm on registered phone number
with automated message that the number is no longer registered.

d. 12 October 2021 email to firm from Joanne Grimes (Authorisations) to
highlight that the request had not been responded to by the deadline of
Friday 8 October 2021. The outstanding information was requested to be
supplied no later than 14 October 2021. Confirmation of an updated phone
number was also requested so the business can meet its existing Threshold
Conditions of being contactable.

e. 19 October 2021 registered phone number was contacted again and still
contained the automated message that it was no longer registered.

f. 22 October 2021, Joanne Grimes (Authorisations), sent a further request
for the missing information. This letter included a statement to the effect
that CIL must contact the Authority within 10 business days, or the
Authority would issue CIL with a Warning Notice.

g. 2 November 2021 the Director called from a mobile phone number to
highlight his business accounts had been locked out but he would respond
to the initial review information request later the same day. The overall
deadline of 5 November 2021 was reiterated and followed up by email. It
was highlighted to the Director that the Non-Responder Process could not
be lifted without receipt of the submission.

h. 3 November 2021 I missed a call from the same mobile number and rang
it back. There was no facility to leave a voicemail so email sent at 15:38
highlighting that I was available for a call that day and the next or that the
Director could email if preferred. No response made.

i. 9 November 2021 email to registered address to highlight the missed
deadline for the outstanding initial review response, to reiterate that the
Non-Responder Process can only be lifted where the outstanding submission
has been made and an opportunity to provide an explanation as to why no
further response has been made since the discussion. Deadline for update
set as the same day.

j. 11 November 2021 tried to call the Director on the mobile number. No
answer and no voicemail facility so sent confirmation by email that the Non-
Responder Process would continue, as no formal submission of the
requested information has been made.

11. The missing information has not been provided.

IMPACT ON THRESHOLD CONDITIONS

12. CIL has failed to respond to 6 separate requests for the provision of information
considered by the Authority to be necessary to allow the Application to be
determined. The final request gave CIL 10 business days to respond and included
a statement to the effect that CIL must contact the Authority, or the Authority
would issue CIL with a Warning Notice. The Authority has issued a Warning
Notice.

13. 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.

14. On the basis of the facts and matters described above, the Authority cannot
ensure that CIL satisfies, and will continue to satisfy, the threshold conditions in
relation to all of the regulated activities for which CIL would have permission, if
the application were granted and accordingly has decided to refuse the
application.

15. Authorised firms (and those seeking authorisation) are expected to engage with
the Authority in an open and cooperative way. The failure to provide the
requested information raises concerns that CIL would fail to do so if the
Application were to be granted.

16. The failure to provide the information raises concerns as to whether CIL:

a. can be effectively supervised by the Authority as required by threshold
condition 2C;

b. has appropriate human resources, given CIL’s failure to provide the
Authority with the requested information as required by threshold
condition 2D; and

c. will conduct its business with integrity and in compliance with proper
standards as required by threshold condition 2E.

IMPORTANT NOTICES

17. This Final Notice is given under section 390 of the Act

18. 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 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 stability of the UK financial system.

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

Authority contacts

20. For more information concerning this matter generally, contact Alex MacDermott,
Technical Specialist, Credit & Lending Department at the Authority (direct line:
020 7066 0264 / email: alexander.macdermott@fca.org.uk).

Alex MacDermott
Executive Decision Maker

ANNEX A – REGULATORY PROVISIONS RELEVANT TO THIS DECISION 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
entitled
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.

Threshold Condition 2C: Effective Supervision

8. 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: Appropriate Resources

9. 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.

10. COND 2.4.2G(2A) provides that, ‘non-financial resources’ of the firm include
human resources it has available.

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 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.