FINAL NOTICE

ACTION

1. By way of an application dated 29 February 2016 GM Contracts Limited (“GMC”) applied

under section 55A of the Act for Part 4A permission to carry on the regulated activity of
credit broking.

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 GMC was entitled to make representations to the Authority about
that proposed action.

5. As no representations have been received by the Authority from GMC within the time

allowed by the Warning Notice, the default procedures in paragraph 2.3.2 of the

Authority’s Decision Procedure and Penalties Manual apply, permitting the Authority to
treat the matters referred to in its Warning Notice as undisputed and, accordingly, to
give a Decision Notice.

6. By its Decision Notice, the Authority gave GMC notice that it had decided to take the

action described above.

7. GMC had 28 days from the date the Decision notice was given to refer the matter to the

Upper Tribunal (formerly known as the Financial Services and Markets Tribunal). No
referral was made to the Upper Tribunal within this period of time or to date.

8. Under section 390(1) of the Act, the Authority, having decided to refuse the Application

and there having been no reference of that decision to the Tribunal, must give GMC
Final Notice of its refusal.

9. The Authority decided to refuse the Application and to give this Final Notice as GMC has

failed to provide the information required by the Authority and, in the absence of the
information sought, the Authority cannot ensure that GMC will satisfy, and continue to
satisfy, the threshold conditions set out in Schedule 6 of the Act.

10. GMC has failed to respond to three separate requests for the provision of the

Information considered, by the Authority, to be necessary to allow the Application to be
determined. These requests were made over a six week period; each request included a
statement to the effect that GMC must contact the Authority or face a Warning Notice.

11. The Authority has therefore determined the Application based upon the information

received to date, in circumstances where its requests for the Information have not been
met. Having reviewed that information, the Authority cannot be sure that GMC satisfies,
and will continue to satisfy, the threshold conditions.

12. Authorised firms (and those seeking authorisation) are expected to engage with the

Authority in an open and cooperative way. The failure to provide the Information raises
concerns that GMC would not do so if the Application were to be granted.

13. The failure to provide the Information raises concerns as to whether GMC:

(1) can be effectively supervised by the Authority as required by threshold condition

2C;


(2) has appropriate human resources, given GMC's failure to provide the Authority with

the information as required by threshold condition 2D; and


(3) will conduct its business with integrity and in compliance with proper standards as

required by the threshold condition 2E.

DEFINITIONS

14. 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 one 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

“CCJ” means County Court Judgement

“the Decision Notice” means the decision notice dated 20 December 2016 given to GMC
by the Authority

“Mr Guina” means Mr Adam Guina, a director of GMC

“the Information” means the information the Authority requested GMC provide in
support of the Application on 19 July 2016

“the PRA” means the Prudential Regulatory Authority

“the RDC” means the Authority’s Regulatory Decisions Committee

“the RTC” means the Authority’s Regulatory Transactions Committee

“SUP” means the Supervision chapter of the Authority’s handbook

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

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

“the Warning Notice” means the warning notice dated 11 November 2016 given to GMC
by the Authority

FACTS AND MATTERS

15. The Application was received by the Authority on 29 February 2016.

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

17. Details of all the relevant communications between the Authority and GMC are set out

below

18. On 19 July 2016, GMC was requested, by way of an email sent to Mr Guina, to provide

the following information by 2 August 2016 (i.e. within 14 days) in support of the
Application:

(1)
Regulatory Business Plan;

(2)
latest end of year accounts;

(3)
confirmation of GMC’s annual income from consumer credit activities;

(4)
confirmation that the CCJ disclosed in the Application had been cancelled or
satisfied; and

(5)
clarification of an inconsistency arising from the applicant’s response to a
question in Form A.

19. On 1 August 2016, the Authority attempted to contact GMC using a telephone number

submitted with the Application. The directors of GMC were unavailable and the person
the Authority spoke to (who identified himself as Scott) attempted to contact Mr Guina.
The Authority was advised to send the email it previously sent GMC on 19 July 2016 to
an alternative email address. The Authority was informed that this email would be
passed to Mr Guina. The Authority informed Scott of the required response date of 2
August 2016 which was sent out in the email. By 2 August 2016 no response had been
received.

20. On 10 August 2016, the Authority contacted GMC using a telephone number submitted

with the Application. The Authority was told by GMC’s receptionist that Mr Guina was
out of the office and unavailable. The receptionist acknowledged the Authority’s email
of 19 July 2016 and stated that she would leave a message for Mr Guina to contact the
Authority. The Authority reiterated the need for a written response.

21. Four weeks after the original email request of 19 July 2016 the Authority had still

received no substantive response to is request for the Information.

22. On 15 August 2016, the Authority wrote to GMC by way of email informing it that a

failure to provide the Information would result in the Application being determined
based upon the information received to date and this might result in a recommendation
to the RTC that it issue GMC with a Warning Notice proposing to refuse the Application.
No response was received to this email by the stated deadline of 30 August 2016 (i.e.
within 15 days).

23. On 1 September 2016, the Authority wrote to the addresses provided with the

Application, noting the lack of a response to its previous correspondence of 19 July, 1
August and 15 August 2016, and reiterated that a failure to provide the Information
would result in the Application being determined based upon the information received
to date. These letters again noted that a failure to reply might result in a
recommendation to the RTC that it issue GMC with a Warning Notice proposing to
refuse the Application. No response was received to this letter by the stated deadline of
15 September 2016 (i.e. within 14 days).

24. On 8 September 2016, the Authority contacted GMC using a telephone number

submitted with the Application. GMC’s receptionist advised that Mr Guina was out of the
office and unavailable but would return that afternoon. The Authority provided its
contact telephone number and was advised that Mr Guina would call the Authority that
afternoon. The Authority did not receive a call from GMC or Mr Guina in response to this
call.

25. On 14 September 2016, the Authority contacted GMC using a telephone number

submitted with the Application. GMC’s receptionist stated that she had sent Mr Guina
reminders to contact the Authority since the previous call of 8 September 2016. The
receptionist confirmed that she had the Authority’s contact number from that call and
would remind Mr Guina to contact the Authority as soon as possible. The Authority did
not receive a call from GMC or Mr Guina in response to this call.

26. On 16 September 2016, the Authority wrote to the addressees provided with the

Application, noting the lack of a response to its previous correspondence of 19 July, 1
August, 15 August and 1 September 2016, and reiterated that a failure to provide the
Information would result in the Application being determined based upon the
information received to date. The letter again noted that this might result in a

recommendation to the RTC that it issue GMC with a Warning Notice proposing the
Application. No response was received to this letter by the stated deadline of 30
September 2016 (i.e. within 14 days).

27. On 20 September 2016, the Authority sent GMC by way of email the letter it sent on 16

September 2016.

28. On 26 September 2016, The Authority attempted to telephone GMC using a telephone

number provided within the Application but the call was answered by the firm’s
answering machine. The Authority left a message confirming GMC must respond to the
correspondence sent 16 September 2016 by 30 September 2016.

29. On 30 September 2016, the Authority telephoned GMC using a telephone number

provided with the Application and spoke to Mr Guina who acknowledged the Authority’s
correspondence. Mr Guina gave an explanation as to why no response had been made
to the Authority’s requests for the Information. Mr Guina told the Authority he was
preparing a response and it would be sent by 7 October 2016. No response was
received to this call by the agreed deadline of 7 October 2016.

30. The Authority received no response to any of the communications set out above.

31. If GMC had replied to the queries set out above, the Authority would have sought

further information as to assess GMC’s application.

IMPACT ON THRESHOLD CONDITIONS

32. The regulatory provisions relevant to this Final Notice are referred to in Annex A.

33. GMC has failed to respond to three separate requests for the provision of the

Information considered, by the Authority, to be necessary to allow the Application to be
determined. These requests were made over a six week period; each request included a
statement to the effect that GMC must contact the Authority or face a Warning Notice.

34. The Authority has therefore determined the Application based upon the information

received to date, in circumstances where its requests for the Information have not been
met. Having reviewed that information, the Authority cannot ensure that GMC satisfies,
and will continue to satisfy, the threshold conditions.

35. Authorised firms (and those seeking authorisation) are expected to engage with the

Authority in an open and cooperative way. The failure to provide the information raises
concerns that GMC would fail to do so if the Application was granted.

36. The failure to provide the Information raises concerns as to whether GMC:

(1)
can be effectively supervised by the Authority as required by threshold condition
2C;

(2)
has the appropriate human resources, given GMC’s failure to provide the Authority
with the Information as required by the threshold condition 2D; and

(3)
will conduct its business with integrity and in compliance with proper standards as
required by threshold condition 2E.

IMPORTANT NOTICES

37. This Final Notice is given under section 390(1) of the Act.

38. 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.

39. The Authority intends to publish such information about the matter to which this Final

Notice relates as it considers appropriate.

Authority contacts

40. For more information concerning this matter generally, contact Darren Moxom,

Manager, Lending and Intermediaries Department at the Authority (direct line: 020
7066 8810 / email: Darren.Moxom@fca.org.uk).

David Fisher
on behalf of the Regulatory Transactions Committee

ANNEX A – REGULATORY PROVISIONS RELEVANT TO THIS FINAL 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 Handbook, including
the part titled 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

manner, the Authority will consider its significance in relation to the regulated activities
for which the firm has or will have permission 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 insolation 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.

8. COND 1.3.3CG provides that, when assessing the Authority’s threshold conditions, the

Authority may have regard to any person appearing to be, or likely to be, in a relevant
relationship with the firm, in accordance with section 55R of FSMA (Persons connected
with an applicant. For example, a firm’s controllers, its directors or partners, other

persons with close links to the firm (COND 2.3), and other persons that exert influence
on the firm which might pose a risk to the firm’s satisfaction of the Authority’s threshold
conditions would be in a relevant relationship with the firm.

Threshold Condition 2C: Effective Supervision

9. 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

10. 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.

11. COND 2.4.2G(2A) provides that ‘non-financial resources’ of the firm include human

resources it has available.

12. 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

13. COND 2.5.2G(2) states that the FCA 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.

14. COND 2.5.4G(2)(c) 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.

15. 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, the threshold condition include, but are not limited to, whether:

(1) 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.