FINAL NOTICE

Healthy Homes Clean Air Limited
The Spinney
Pontefract Road
Ackworth
PONTEFRACT
West Yorkshire
WF7 7ET

7 March 2017

ACTION

1. By way of an application dated 12 November 2015 Healthy Homes Clean Air

Limited (“HHCA”) applied under section 55A of the Act for Part 4A permission to
carry on the regulated activities of:

i.
limited permission lending;

ii.
consumer hire; and

iii.
limited permission 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 HHCA was entitled to make representations to the Authority
about that proposed action.

5. As no representations were received by the Authority from HHCA 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 applied, 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 HHCA notice that it had decided to take

the action described above.

7. HHCA had 28 days from the date the Decision Notice was given to refer the

matter to the Tribunal. No referral was made to the 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 HHCA Final Notice of its refusal.

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

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

10. HHCA has failed to provide a substantive response to four separate requests for

the provision of information considered, by the Authority, to be necessary to
allow the Application to be determined. These requests were made over a 23
week period. The last three requests included a statement to the effect that HHCA
must contact the Authority or face a Warning Notice.

11. 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. Having reviewed that information, the Authority cannot
ensure that the applicant 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
requested information raises concerns that HHCA would fail to do so if the
Application were to be granted.

13. The failure to provide the information raises concerns as to whether HHCA:

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

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

iii.
will conduct its business with integrity and in compliance with proper
standards as required by 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.

“the Decision Notice” means the decision notice dated 16 January 2016 given to
HHCA by the Authority.

“L&I” means the Authority’s Lending and Intermediaries Department.

“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 section of the Authority’s handbook.

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

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

“the Warning Notice” means the warning notice dated 30 November 2016 given
to HHCA by the Authority.

FACTS AND MATTERS

15. The Application was received by the Authority on 12 November 2015.

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

17. Details of all the relevant communications between the Authority and HHCA are

set out below:

i.
On 17 May 2016, HHCA was asked to provide the following information in
support of the Application by 31 May 2016:

a) confirmation that HHCA agreed with L&I’s assessment that the firm was

a “domestic premises supplier”;

b) in the event that HHCA agreed it was a domestic premises supplier,

confirmation that HHCA consented to adding a limitation to its credit
broking permission so that it may only be carried out in connection with
goods or services sold in customers’ homes;

c) confirmation that HHCA consented to the regulated activities applied for

in the Application to be amended;

d) a completed full permission application top up form;

e) HHCA’s business plan;

f) HHCA’s compliance monitoring plan;

g) HHCA’s organisation structure;

h) additional financial documents listed on the Authority’s website for full

permission Part 4A applications;

i) payment of the additional fee due to the Authority as the Application

had been amended following submission from a limited permission to a
full permission application;

j) confirmation of whether HHCA conducts background checks on staff

who visit customers’ homes;

k) details of how HHCA monitors employees who visit customers’ homes,

including any measures to ensure customers are not subjected to high
pressure selling;

l) confirmation of whether HHCA sales staff receive incentives for making

credit sales;

m) details of how HHCA ensures its customers are treated fairly;

n) HHCA’s sale process; and

o) HHCA’s approach to vulnerable customers.

ii. On 14 July 2016 L&I wrote to HHCA by way of email noting it had not received

a response to its previous correspondence of 17 May 2016. L&I informed HHCA
that if HHCA continued to fail to provide the requested information, the
Application may be refused. No response was received to this correspondence.


iii. On 1 August 2016 L&I wrote to HHCA informing it that a failure to provide the

information requested on 17 May 2016 would result in the Application being
determined based upon the information received to date and that this would
result in a recommendation to the RTC that it give HHCA a Warning Notice
proposing to refuse the Application. No response was received to this
correspondence by the stated deadline of 12 August 2016 (i.e. within 11 days).


iv. On 26 August 2016 L&I wrote to HHCA informing it that a failure to provide the

information requested would result in the Application being determined based
upon the information received to date and that this would result in a
recommendation to the RTC that it give HHCA a Warning Notice proposing to
refuse the Application. Although the firm did telephone L&I on the day of the
stated deadline (12 September 2016) stating it wished to withdraw the
Application as it decided not to carry out regulated activities, HHCA did not
substantively respond to this correspondence.


v. On 19 September 2016 L&I wrote to HHCA by way of email, requesting the

withdrawal to be confirmed in writing. No response has been received from
HHCA to date.

vi. On 17 October 2016 L&I wrote to HHCA, noting the lack of a response to its

previous correspondence of 17 May, 14 July, 1 August, 26 August and 19
September 2016 and reiterated that a failure to provide the information
requested would result in the Application being determined based upon the
information received to date. The letter again noted that this would result in a
recommendation to the RTC that it give HHCA a Warning Notice proposing to
refuse the Application. No response was received to this letter by the stated
deadline of 28 October 2016 (i.e. within 11 days).

IMPACT ON THRESHOLD CONDITIONS

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

19. HHCA has failed to substantively respond to four 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 23 week
period. The last three requests included a statement to the effect that HHCA must
contact the Authority or face a Warning Notice.

20. The Authority has therefore determined the Application based upon the

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

21. 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 HHCA would fail to do so if the
Application were to be granted.

22. The failure to provide the information raises concerns as to whether HHCA:

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

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

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

IMPORTANT NOTICES

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

24. 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.

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

Final Notice relates as it considers appropriate.

Authority contacts

26. For more information concerning this matter generally, contact John Battram,

Manager, Lending and Intermediaries Department at the Authority, direct line:
020 7066 1252; email: John.Battram@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

Threshold Conditions - COND

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 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) 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.