FIRST SUPERVISORY NOTICE

To:
Mark Ian Warner trading as Advanced Financial


ACTION

1.
For the reasons given below and pursuant to section 55J of the Act, the Authority has
decided to vary the permission granted to Mr Warner pursuant to Part 4A of the Act, by
removing all regulated activities with immediate effect. Accordingly, Mr Warner’s Part 4A
permission no longer includes the regulated activities of:

(a)
advising on investments (except on Pension Transfers and Pension Opt Outs);

(b)
advising on regulated mortgage contracts;

(c)
agreeing to carry on a regulated activity;

(d)
arranging (bringing about) deals in investments;

(e)
arranging (bringing about) regulated mortgage contracts;

(f)
making arrangements with a view to regulated mortgage contracts; and

(g)
making arrangements with a view to transactions in investments.

2.
The Authority has further decided to vary Mr Warner’s Part 4A permission by imposing
the following requirements, pursuant to section 55J of the Act, namely that Mr Warner
must within 14 days of the date of this First Supervisory Notice:

(a)
notify in writing all clients for Mr Warner’s regulated activities that he is no longer
permitted by the Authority to carry on regulated activities; and

(b)
provide the Authority with a copy of the written notification sent to all clients for his
regulated activities pursuant to (a) above, together with a list of all clients to whom
such notification has been sent.

REASONS FOR ACTION

3.
Mr Warner has failed to provide information to the Authority, despite repeated requests
to do so and has not been open and co-operative in all of his dealings with the Authority,
in breach of Principle 11 (Relations with regulators) of the Principles.

4.
The information that Mr Warner has failed to provide is required by the Authority to
assess the serious issue of whether Mr Warner is a fit and proper person to conduct
regulated activities. It therefore appears to the Authority that Mr Warner is failing to
meet the Suitability Threshold Condition and Principle 6 (Customers’ interests) of the
Principles. In particular, Mr Warner repeatedly failed to provide information regarding a
transaction that he carried out in relation to Customer A (to both the FOS and the
Authority) and in relation to his and his business’ financial position. This failure leads the
Authority to consider that Mr Warner presents a serious risk to consumers because the
Authority cannot be satisfied that Mr Warner’s affairs are being conducted in an
appropriate manner, having regard in particular to the interests of consumers.

5.
Mr Warner is therefore failing to satisfy the Authority that he is a fit and proper person to
conduct regulated activities and the Authority considers it necessary to take immediate
action in order to protect the interests of consumers because the risk of loss or other
adverse effect on consumers by Mr Warner’s failings, causes the Authority to have very
serious concerns about Mr Warner such that the exercise of the Authority’s own-initiative
power to vary Mr Warner’s Part 4A permission with immediate effect is an appropriate
response to those concerns.

DEFINITIONS

6.
The definitions below are used in this First Supervisory Notice:

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

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 “FOS” means the Financial Ombudsman Service;

the “Handbook” means the Authority’s Handbook of Rules and Guidance;

“Mr Warner” means Mark Ian Warner trading as Advanced Financial Management;

“Mr Warner’s Part 4A permission” means Mr Warner’s permission granted pursuant to
Part 4A of the Act;

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

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

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

FACTS AND MATTERS RELIED ON

7.
Mr Warner, a sole trader, was authorised by the Authority on 5 April 2005 to conduct
regulated home finance and designated investment business.

8.
Since 19 June 2013, the Authority has requested that Mr Warner provide details of his
personal financial circumstances including details of any debts and outstanding loans,
and of any overdraft facilities and credit arrangements that he may have to service those
debts. On 12 September 2013, the Authority wrote to Mr Warner requiring that he
provide that information under section 165(1) and section 175(1) of the Act.

9.
Since 12 September 2013, the Authority has also requested that Mr Warner provide a full
and detailed explanation (including supporting evidence), in relation to a transaction Mr
Warner made on behalf of one of his customers (Customer A).

10.
Despite numerous further requests by the Authority for the information, Mr Warner has
failed without adequate, or any, explanation to provide the information.

FAILINGS

11.
The regulatory provisions relevant to this First Supervisory Notice are set out in the
Annex.

12.
From the facts and matters described above the Authority, having regard to its
operational objectives, has reached the following conclusions:


Mr Warner’s unreasonable failure to provide the information requested by the
Authority leads the Authority to consider that he is failing to be open and co-
operative with the Authority, in breach of the suitability Threshold Condition and
Principle 11 (Relations with regulators) of the Principles;


Mr Warner’s failure to provide information in relation to the transaction he carried
out in relation to Customer A (to both the FOS and the Authority), leads the
Authority to conclude that Mr Warner presents a risk to consumers because the
Authority cannot be satisfied that Mr Warner’s affairs are being conducted in an
appropriate manner, having regard in particular to the interests of consumers. This
leads the Authority to be concerned that Mr Warner may not be fit and proper, and
that he may also be in breach of the suitability Threshold Condition and Principle 6
(Customers’ interests) of the Principles;


the risk of loss or other adverse effect on consumers by Mr Warner’s failings, which
are material breaches of requirements imposed on him by the Authority, causes the
Authority to have very serious concerns about Mr Warner such that the exercise of
the Authority’s own-initiative power to vary Mr Warner’s Part 4A permission with
immediate effect is an appropriate response to those concerns; and


it is desirable to exercise the Authority’s own initiative power to vary Mr Warner’s
Part 4A permission with immediate effect to meet its operational objectives, and
specifically in relation to Mr Warner, the objective of the protection of consumers.

PROCEDURAL MATTERS

Decision Maker

13.
The decision which gave rise to the obligation to give this First Supervisory Notice was
made by a Deputy Chairman of the Regulatory Decisions Committee.

14.
This First Supervisory Notice is given to Mr Warner under section 55Y(4) and in
accordance with section 55Y(5) of the Act, and is being served on Mr Warner at his place
of business as last notified to the Authority. The following statutory rights are important.

The Tribunal

15.
Mr Warner has the right to refer the matter to which this First Supervisory Notice relates
to the Tribunal. The Tax and Chancery Chamber is the part of the Tribunal which,
amongst other things, hears references arising from decisions of the Authority. Under
paragraph 2(2) of Schedule 3 of the Tribunal Procedure (Upper Tribunal) Rules 2008, Mr
Warner has 28 days from the date on which this First Supervisory Notice is given to him
to refer the matter to the Tribunal.

16.
A reference to the Tribunal can be made by way of a reference notice (Form FTC3)
signed by Mr Warner and filed with a copy of this First Supervisory Notice. The Tribunal’s
contact details are: The Upper Tribunal, Tax and Chancery Chamber, 45 Bedford Square,
London
WC1B
3DN
(telephone:
020
7612
9700;
email:

financeandtaxappeals@tribunals.gsi.gov.uk).

17.
Further details are contained in “Notes for applicants Form FTC3” which is available from
the Tribunal website:

18.
Mr Warner should note that a copy of the reference notice (Form FTC3) must also be sent
to the Authority at the same time as filing a reference with the Tribunal. A copy of the
reference notice should be sent to Stephanie Prowse at the Financial Conduct Authority,
25 The North Colonnade, Canary Wharf, London E14 5HS.

Representations

19.
Mr Warner has the right to make written and oral representations to the Authority. The
deadline for providing written representations and/or notifying the Authority that Mr
Warner wishes to make oral representations is 8 April 2014, or such later date as may be
permitted by the Authority. The address for doing so is:

Lynn Cheesman
Regulatory Decisions Committee Professional Support Services
Financial Conduct Authority
25 The North Colonnade
Canary Wharf
London
E14 5HS

20.
Mr Warner should note that section 391 of the Act requires the Authority when the First
Supervisory Notice takes effect (and this First Supervisory Notice takes immediate
effect), to publish such information about the matter as it considers appropriate.

Contacts

21.
For more information concerning this matter generally, Mr Warner should contact
Stephanie Prowse at the Authority (direct line: 020 7066 9404).

22.
If Mr Warner has any questions regarding the procedures of the Regulatory Decisions
Committee, he should contact Lynn Cheesman (direct line: 020 7066 3192).

Peter Hinchliffe
Deputy Chairman, Regulatory Decisions Committee

ANNEX

RELEVANT STATUTORY PROVISIONS

1.
The Authority’s operational objectives established in section 1(B) of the Act include the
protection of consumers.

2.
The Authority is authorised by section 55J of the Act to exercise the following powers:


to vary an authorised person’s permission where it appears to the Authority that
such person is failing to satisfy the Threshold Conditions (section 55J(1)(a));


to vary an authorised person’s permission where it is desirable to do so to
advance any of its operational objectives (section 55J(1)(c)(i));


to vary such a permission by removing a regulated activity from those for which
the permission is given (section 55J(2)(a)(ii)); and


to include any provision in the permission as varied that could be included if a
fresh permission were being given in response to an application under section
55A of the Act (section 55J(10)).

3.
Section 55Y(3) of the Act allows such a variation to take effect immediately (or on a
specified date) only if the Authority having regard to the ground on which it is
exercising its own-initiative power, reasonably considers that it is necessary for the
variation to take effect immediately (or on that date).

4.
Section 391 of the Act provides that:

(5)
When a supervisory notice takes effect, the [Authority] must

publish such information about the matter to which the

notice relates as it considers appropriate.

(6)
The [Authority] may not publish information under this

section if, in its opinion, publication of the information would be-

(a) unfair to the person with respect to whom the action was taken,

(b) prejudicial to the interests of consumers…

(7)
Information is to be published under this section in such manner as

the [Authority] considers appropriate.”

5.
Paragraph 2D to Schedule 6 of the Act states that:

“The resources of A must be appropriate in relation to the regulated

activities that A carries on or seeks to carry on.”

6.
Paragraph 2E to Schedule 6 to the Act states that:

“A must be a fit and proper person having regard to all the circumstances,
including-

(c)
the need to ensure that A’s affairs are conducted in an appropriate
manner, having regard in particular to the interests of consumers and
the integrity of the UK financial system;

(d)
whether A has complied and is complying with … requests made by

the [Authority], relating to the provision of information to the

RELEVANT HANDBOOK PROVISIONS

7.
In exercising its power to vary a Part 4A permission, the Authority must have regard to
guidance published in the Handbook. The relevant main considerations in relation to the
action specified above are set out below.

Relevant Principles

8.
Principle 6 (Customers’ interests) of the Principles, states that a firm must pay due
regard to the interests of its customers and treat them fairly.

9.
Principle 11 (Relations with regulators) of the Principles, states that a firm must deal
with its regulators in an open and cooperative way.

Guidance concerning the relevant Threshold Condition

10.
Guidance on the Threshold Conditions is set out in the part of the Handbook entitled
Threshold Conditions (“COND”).


COND 2.5 – Suitability: Paragraph 2E of Schedule 6 to the Act

11.
COND 2.5.1AUK(1) reproduces the relevant statutory provision that the person
concerned must satisfy the Authority that he is a fit and proper person having regard to
all the circumstances, including amongst other things, whether he has complied and is
complying with requests made by the Authority, relating to the provision of information
to the Authority and the need to ensure that his affairs are conducted in an appropriate
manner, having regard in particular to the interests of consumers (COND
2.5.1AUK(1)(c) and (d)).

12.
COND 2.5.4G(2) states that examples of the considerations to which the Authority may
have regard when assessing whether a firm will satisfy and continue to satisfy the
Threshold Conditions include whether the firm conducts its business in compliance with
proper standards (COND 2.5.4G(2)(c)).

13.
COND 2.5.6G states that examples of considerations to which the Authority may have
regard when assessing whether a firm will satisfy, and continue to satisfy the suitability
Threshold Condition include whether the firm has been open and co-operative in all its
dealings with the Authority (COND 2.5.6G(1)).

OTHER RELEVANT REGULATORY PROVISIONS

14.
The Authority's policy in relation to its enforcement powers is set out in the Enforcement
Guide (EG), certain provisions of which are summarised below.

15.
EG 8.1 reflects the provisions of section 55J of the Act that the Authority may use its
own-initiative power to vary or cancel the permission of an authorised firm where a firm
is failing or is likely to fail to satisfy the Threshold Conditions (EG 8.1(1)); or where it is
desirable to exercise the power in order to advance one or more of its operational
objectives (EG 8.1(2)).

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

16.
EG 8.1B provides that the Authority will have regard to its statutory objectives and the
range of regulatory tools that are available to it, when it considers how it should deal
with a concern about a firm.

17.
EG 8.3 provides that the Authority will exercise its formal powers under section 55J or
55L of the Act, where the Authority considers it is appropriate to ensure a firm meets its
regulatory requirements. EG 8.3(1) specifies that the Authority may consider it
appropriate to exercise its powers where it has serious concerns about a firm or the way
its business is being or has been conducted.

18.
EG 8.5(1)(a) specifies that the Authority will consider exercising its own-initiative power
under section 55J(1)(a) or 55L(2)(a) of the Act, where the firm appears to be failing, or
appears likely to fail, to satisfy the Threshold Conditions relating to one or more, or all,
of its regulated activities.

19.
EG 8.5(1)(b) specifies that the Authority will consider exercising its own-initiative power
under section 55J(1)(a) or 55L(2)(a) of the Act, where the firm appears not to be a fit
and proper person to carry on a regulated activity because it has breached requirements
imposed on it by or under the Act (including Principles and rules) and the breaches are
material in number or individual seriousness (EG 8.5(1)(b)(iii)).

Use of the own-initiative powers in urgent cases

20.
EG 8.6 states that the Authority may impose a variation of permission so that it takes
effect immediately or on a specified date if it reasonably considers it necessary for the
variation to take effect immediately (or on the date specified), having regard to the
ground on which it is exercising its own-initiative powers.

21.
EG 8.7 provides the circumstances in which the Authority will consider exercising its own
initiative power as a matter of urgency, include where the information available to it
indicates serious concerns about the firm or its business that need to be addressed
immediately (EG 8.7(1)).

22.
EG 8.8 sets outs out a non-exhaustive list of factors the FSA will consider in exercising
its own-initiative power as a matter of urgency. EG 8.8(1) specifies that the FSA will
consider urgent own-initiative action if there is information indicating a significant loss,
risk of loss or other adverse effects for consumers, where action is necessary to protect
their interests.

23.
EG 8.9 sets out the factors which will determine whether the urgent exercise of the FSA’s
own-initiative power is an appropriate response to serious concerns, including: the
extent of any consumer loss or risk of consumer loss or other adverse effect on
consumers (EG 8.9(1)) and the extent to which customer assets appear to be at risk (EG
8.9(2)).