FINAL NOTICE

Address: 52 Forder Way
Peterborough
Cambridgeshire
PE7 8JB






Individual FSA reference:
GWF00006

1.
ACTION

1.1.
For the reasons given in this Notice, the FSA hereby makes an order pursuant to

section 56 of the Financial Services and Markets Act 2000 (the “Act”) prohibiting Mr

Gary Forster (“Mr Forster”) from performing any significant influence functions and

the CF30 (Customer) function in relation to any regulated activity carried on by any

authorised person, exempt person or exempt professional firm which promotes and or

recommends unregulated collective investment schemes (“UCIS”) to retail customers

(the “Prohibition Order”). For the avoidance of doubt, the Prohibition Order in no

way prevents Mr Forster from continuing to perform any functions in respect of

Rockingham Independent Limited’s (“Rockingham”) direct offer annuity business

related activities.

2.
SUMARY OF REASONS

2.1
On the basis of the facts and matters described below, the FSA concluded that Mr

Forster lacks the competence and capability to perform any function in relation to the

promotion and recommendation of UCIS to retail customers by any authorised person,

exempt person or exempt professional firm.

2.2
Mr Forster had no knowledge or understanding of the statutory and regulatory

restrictions on the promotion of UCIS to retail customers and therefore failed to take

reasonable steps to ensure that Rockingham had regard to those restrictions when it

promoted and recommended UCIS. This failure put 39 customers at risk of receiving

unsuitable personal recommendations (ie pension and investment advice) between

January 2008 and September 2010 (“ the relevant period”)

2.3
As the 50 per cent shareholder of Rockingham, Mr Forster also is indirectly affected

by the financial penalty imposed on Rockingham.

Statutory provisions, regulatory guidance and policy

2.4
Relevant statutory provisions, regulatory guidance and policy are set out as an Annex

to this Notice.

Facts and matters relied on

2.5
Mr Forster was and continues to be an adviser at Rockingham.

2.6
From 20 November 2006 Mr Forster was approved to perform the controlled function

of CF21 (Investment Adviser) in relation to regulated activities carried on by

Rockingham, which was converted to the CF30 (Customer) function on 1 November

2007. Mr Forster also performed the role of chief executive at Rockingham without

Rockingham first obtaining approval from the FSA for him to perform the controlled

function of CF3 (Chief Executive) and he attended Rockingham’s Board meetings.

Mr Forster held himself out to be the CEO of Rockingham in correspondence with

third parties and to the employees of Rockingham when in fact he was the CEO of

Rockingham Plc the parent company of Rockingham.

Breach of the restriction on the promotion of UCIS

2.7.
UCIS is defined in the glossary to the FSA Handbook of Rules and Guidance as “a

collective investment scheme which is not a regulated collective investment scheme”.

Unless a collective investment scheme (“CIS”) falls within the narrow definition of a

regulated CIS1, it will be a UCIS. A UCIS does not carry the same level of regulatory

oversight as a CIS in relation to matters such as the clarification of fees charged or

diversification, but it is still subject to regulation, notably around the extent to which

and persons to whom it can be marketed. Section 238 of the Act precludes the

promotion of a UCIS by an authorised person except in certain specified

circumstances, broadly these include promotions to investment professionals, existing

customers of an authorised person, and certain high net worth individuals or

sophisticated investors.

2.8
The FSA identified that at least 39 of Rockingham’s customers were recommended

investing in UCIS.

2.9
Mr Forster failed to take reasonable steps to have a sufficient understanding of the

regulatory requirements and restrictions relating to the promotion of UCIS. As a

result of the deficiencies in his knowledge regarding the promotion of UCIS, there

was a risk that unsuitable recommendations to invest in UCIS would be made to

customers.

2.10
Given Mr Forster’s failure to ensure that he had the necessary approval before he

performed the de facto role of chief executive at Rockingham, and his failure to

ensure that Rockingham had regard to the statutory and regulatory restrictions relating

to UCIS before he and Rockingham’s other advisers promoted and recommended

1 A CIS is defined in the Handbook Glossary as follows:
(a) An investment company with variable capital; or
(b) An authorised unit trust scheme: or
(c) A recognised scheme, (ie a CIS constituted overseas and formally recognised under sections 264, 270 or 272
of the Financial services and Markets Act 2000);
Whether or not the units are held within an ISA or personal pension scheme.

UCIS, we consider that Mr Forster is not fit and proper in terms of a lack of

competence and capability in this regard and, as a consumer protection measure, it is

necessary and proportionate that he should be prevented from performing any

significant influence and customer functions at any authorised firm whose activities

include promoting and/or recommending UCIS.

3.
DECISION MAKER

3.1
The decision which gave rise to the obligation to give this Final Notice was made on

behalf of the FSA by the Settlement Decision Makers.

4.
IMPORTANT

4.1
This Final Notice is given in accordance with section 390 of the Act. The effective

date of the Prohibition Order is 15 August 2011.

4.2
Sections 391(4), 391(6) and 391(7) of the Act apply to the publication of information

about the matter t which this notice relates. Under those provisions, the FSA must

publish such information about the matter to which this notice relates as the FSA

considers appropriate. The information may be published in such manner as the FSA

considers appropriate. However, the FSA may not publish information if such

publication would, in the opinion of the FSA, be unfair to you or prejudicial to the

interests of consumers.

4.3
The FSA intends to publish such information about the matter to which this Final

Notice relates as it considers appropriate.

FSA contacts

4.4
For more information concerning this matter generally, contact Chris Walmsley at the

FSA (direct line: 020 7066 5894) of the Enforcement and Financial Crime Division of

the FSA.

Tom Spender
Head of Departmment
FSA Enforcement and Financial Crime Division


Annex (paragraph 2.4)

1.
STATUTORY PROVISIONS, REGULATORY GUIDANCE AND POLICY

Statutory provisions

1.1
The FSA’s statutory objectives, set out in section 2(2) of the Act, include the
protection of consumers, maintaining market confidence and the reduction of
financial crime.

1.2
The FSA has the power, by virtue of section 56 of the Act, to make an order
prohibiting Mr Forster from performing a specified function, any function falling
within a specified description or any function, if it appears to the FSA that he is are
not a fit and proper person to perform functions in relation to a regulated activity
carried on by an authorised person. Such an order may relate to a specific regulated
activity, an activity falling within a specified description or all regulated activities.

Fit and proper test for approved persons

1.3
A part of the FSA’s Handbook has the title Fit and Proper test for Approved Persons
(“FIT”). The purpose of FIT is to outline the main criteria for assessing the fitness
and propriety of a candidate for a controlled function. FIT is also relevant in assessing
the continuing fitness and propriety of an approved person.

1.4
FIT 1.3.1G provides that the FSA will have regard to a number of factors when
assessing a person’s fitness and propriety. One of the considerations will be the
person’s competence and capability.

1.5
In determining a person’s competence and capability, FIT 2.2 provides that the FSA
will have regard to matters including, but not limited to, those set out in FIT 2.2.1G:

(1)
whether the person satisfies the relevant FSA training and competence
requirements in relation to the controlled function the person performs or is
intended to perform;

(2)
whether the person has demonstrated by experience and training that the
person is able , or will be able if approved, to perform the controlled function.

FSA’s policy for exercising its power to make a prohibition order and withdraw
a person’s approval

1.6
The FSA’s approach to exercising its powers to make prohibition orders and withdraw
approvals is set out at Chapter 9 of the Enforcement Guide (“EG”). The FSA has
had regard to the appropriate provisions of EG that applied during the relevant period.

1.7
EG 9.1 states that the FSA’s power to make prohibition orders under section 56 of the
Act helps it work towards achieving its regulatory objectives. The FSA may exercise
this power where it considers that, to achieve any of those objectives, it is appropriate
either to prevent an individual from performing any functions in relation to regulated
activities or to restrict the functions which he may perform.


1.8
EG 9.2 states that the FSA’s effective use of the power under section 63 of FSMA to
withdraw approval from an approved person will also help to ensure high standards of
regulatory conduct by preventing an approved person from continuing to perform the
controlled function to which the approval relates if he is not a fit and proper person to
perform that function. Where it considers this is appropriate, the FSA may prohibit an
approved person, in addition to withdrawing their approval.

1.9
EG 9.4 sets out the general scope of the FSA’s powers in this respect, which include
the power to make a range of prohibition orders depending on the circumstances of
each case and the range of regulated activities to which the individual’s lack of fitness
and propriety is relevant. EG 9.5 provides that the scope of a prohibition order will
vary according to the range of functions which the individual concerned performs in
relation to regulated activities, the reasons why he is not fit and proper and the
severity of risk posed by him to consumers or the market generally.

1.10
In circumstances where the FSA has concerns about the fitness and propriety of an
approved person, EG 9.8 to 9.14 provides guidance. In particular, EG 9.8 states that
the FSA may consider whether it should prohibit that person from performing
functions in relation to regulated activities, withdraw that person’s approval or both.
In deciding whether to withdraw approval and/or make a prohibition order, the FSA
will consider whether its regulatory objectives can be achieved adequately by
imposing disciplinary sanctions.

1.11
EG 9.9 states that the FSA will consider all the relevant circumstances when deciding
whether to make a prohibition order against an approved person and/or to withdraw
that person’s approval. Such circumstances may include, but are not limited to, the
following factors:

(1)
whether the individual is fit and proper to perform functions in relation to
regulated activities, including in relation to the criteria for assessing the fitness
and propriety of an approved person in terms of competence and capability as
set out in FIT 2.2;

(2)
the relevance and materiality of any matters indicating unfitness;

(3)
the length of time since the occurrence of any matters indicating unfitness;

(4)
the particular controlled function the approved person is (or was) performing,
the nature and activities of the firm concerned and the markets in which he
operates;

(5)
the severity of the risk which the individual poses to consumers and to
confidence in the financial system; and

(6)
the previous disciplinary record and general compliance history of the
individual.

1.12
EG 9.12 provides a number of examples of types of behaviour which have previously
resulted in the FSA deciding to issue a prohibition order or withdraw the approval of
an approved person. The examples include serious lack of competence.

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