FINAL NOTICE
__________________________________________________________________

To:

INZMO Europe GmbH


Address:
Eberrstrasse 2

Stadtle 28

10117 Berlin

Germany

FRN:
847947

Dated:
18 January 2022



ACTION

1.
For the reasons set out in this Final Notice, the Authority hereby takes the following
action.

2.
The Authority issued to IEG the Decision Notice, which notified it that for the reasons
given below and pursuant to section 55J of the Act and Regulation 8(5)(a) of the EEA
Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations
2018, the Authority had decided to cancel IEG’s Part 4A permission.

3.
IEG has not referred the matter to the Tribunal within 28 days of the date on which the
Decision Notice was given to it.

4.
Accordingly, the Authority has today cancelled IEG’s Part 4A permission.

SUMMARY OF THE REASONS

5.
IEG has failed to respond to repeated requests for the provision of information, namely
the information set out in the TPR Attestation Survey. Authorised firms (and those
seeking authorisation) are expected to engage with the Authority in an open and
cooperative way. The Authority has concluded, on the basis of the facts and matters set
out below, that IEG is failing to satisfy the suitability and effective supervision Threshold
Conditions. In particular, the Authority is not satisfied that IEG is fit and proper having
regard to all the circumstances or that it can be effectively supervised. Specifically, IEG
has failed to be open and co-operative in all its dealings with the Authority, and as a
result, the Authority is not satisfied that IEG’s business is being, or will be, managed in
such a way as to ensure that its affairs will be conducted in a sound and prudent manner
or that IEG is ready, willing and organised to comply with the requirements and
standards under the regulatory system.

DEFINITIONS

6.
The definitions below are used in this Final Notice (and in the Annex):

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

“the Authority” means the Financial Conduct Authority;

“COND” means the Threshold Conditions part of the Handbook;

“the Decision Notice” means the decision notice given to IEG dated 10 November 2021;

“the effective supervision Threshold Condition” means the threshold condition set out in
paragraph 2C of Schedule 6 of the Act;

“EG” means the Enforcement Guide;

“the Handbook” means the Authority’s Handbook of rules and guidance;

“IEG” means INZMO Europe GmbH;

“IEG’s Part 4A permission” means the deemed permission granted by the Authority to
IEG under Part 4A of the Act;

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

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

“the suitability Threshold Condition” means the threshold condition set out in paragraph
2E of Schedule 6 to the Act;

“SUP” means the Supervision section of the Handbook;

“SYSC” means the Senior Management Arrangements, Systems and Controls section of
the Handbook;

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

“the TPR” means the Temporary Permissions Regime for EEA-based firms that were
formerly carrying on regulated activities in the UK through passporting arrangements;


3

“the TPR Attestation Survey” means the firm attestation sent by the Authority to IEG
requesting information from IEG regarding whether, having obtained a Part 4A
permission under the TPR, it understands its regulatory obligations and asking IEG to
provide to the Authority contact details for individuals with specific responsibilities at
IEG;

“the TPR Notification Form” means the form submitted by IEG notifying the Authority of
its intention to enter into the TPR; and

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

FACTS AND MATTERS

7.
On 14 October 2019, IEG submitted the TPR Notification Form notifying the Authority
that it wished to enter into the TPR in order to obtain a temporary Part 4A permission
to carry on regulated activity in the UK under the passporting arrangements set out in
Schedule 3 or 4 of the Act.

8.
On 21 January 2021, the Authority informed IEG by email that it had been granted a
deemed Part 4A permission and was now regulated by the Authority for its UK business.

9.
On 25 January 2021, the Authority sent an email to IEG using the ‘key contact’ details
in the TPR Notification Form requiring IEG, in accordance with section 165 of the Act,
to provide the information requested within the TPR Attestation Survey by 29 January
2021.

10.
On 28 January 2021, using the same ‘key contact’ email address for IEG, the Authority
sent an email to IEG, reminding IEG that the required information within the TPR
Attestation Survey was to be provided by 29 January 2021.

11.
On 4 February 2021, the Authority sent an email to IEG using the same ‘key contact’
email address stating that the information IEG was required to provide within the TPR
Attestation Survey was now overdue. The Authority gave IEG a revised deadline of 11
February 2021 to provide the information specified in the TPR Attestation Survey.

12.
To date, the Authority has not received any response to its requests for information,
including those dated 25 and 28 January 2021 and 4 February 2021 and IEG has failed
to provide the information.

FAILINGS

13.
The statutory and regulatory provisions relevant to this Final Notice are set out in the
Annex.

14.
IEG has failed to respond to repeated requests for the provision of information, namely
the information set out in the TPR Attestation Survey. The Authority considers this
information to be necessary to establish that IEG, having obtained a Part 4A permission
under the TPR, understands its regulatory obligations and for IEG to provide to the
Authority contact details for individuals with specific responsibilities at IEG.

15.
Authorised firms are expected to engage with the Authority in an open and cooperative
way. The failure to respond to the Authority’s requests and provide the requested
information leads the Authority to conclude that IEG:

(a)
has failed to be open and cooperative in all its dealing with the Authority in breach
of Principle 11;


(b)
is not capable of being effectively supervised by the Authority because the
Authority is not satisfied that it will receive adequate information from IEG to
enable the Authority to determine whether IEG is complying with the requirements
and standards under the regulatory system, and that IEG is therefore failing to
satisfy the effective supervision Threshold Condition; and

(c)
is not a fit and proper person because the Authority is not satisfied that IEG’s
business is being, or is to be, managed in such a way as to ensure its affairs will
be conducted in a sound and prudent manner, and that IEG is therefore failing to
satisfy the suitability Threshold Condition.

16.
Accordingly, the Authority has cancelled IEG’s Part 4A permission.

DECISION MAKER

17.
This decision which gave rise to the obligation to give this Final Notice was made by the
RDC.

IMPORTANT

18.
This Final Notice is given to IEG in accordance with section 390(1) of the Act.

Publicity

19.
The Authority must publish such information about which this Final 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 information would, in the opinion of the Authority, be unfair to IEG
or prejudicial to the interests of consumers.

20.
The Authority intends to publish such information about the matter to which this Final
Notice relates as it considers appropriate.

Authority Contact

21.
For more information concerning this matter generally, IEG should contact Dilip
Vekariya at the Authority (direct line: 020 7066 5520).




Anna Couzens
Enforcement and Market Oversight Division

5

ANNEX

RELEVANT STATUTORY PROVISIONS

1.
Section 55J of the Act provides that where it appears to the Authority that an
authorised person with a Part 4A permission is failing, or is likely to fail, to satisfy the
threshold conditions for which the Authority is responsible it may exercise its power
under this section to cancel the person’s Part 4A permission.

2.
Regulation 8(1) of the EEA Passport Rights (Amendment, etc., and Transitional
Provisions) (EU Exit) Regulations 2018 provides that a person to whom a temporary
Part 4A permission is granted has permission to carry on a regulated activity in the UK
under Part 4A of the Act. Regulations 8(4) and (5) provide that a power of a regulator
under the Act is exercisable in respect of such a person as it is in respect of a person
with permission under Part 4A of the Act. Regulation 8(5)(a) provides that such a
power is exercisable in relation to a variation or cancellation of a permission to carry
on a regulated activity.

3.
The effective supervision Threshold Condition provides, in relation to a person (“A”)
carrying on, or seeking to carry on, regulated activities which do not include a PRA-
regulated activity, that:

“A must be capable of being effectively supervised by [the Authority] having regard
to all the circumstances, including-

[…]

(c) the way in which A’s business is organised”.

4.
The suitability Threshold Condition provides, in relation to a person (“A”) carrying on,
or seeking to carry on, regulated activities which do not include a PRA-regulated
activity, that:

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

[…]

(f) whether A’s business is being, or is to be, managed in such a way as to ensure
that its affairs will be conducted in a sound and prudent manner.”


RELEVANT HANDBOOK PROVISIONS

5.
In exercising its power to cancel a firm’s Part 4A permission, the Authority must have
regard to the regulatory requirements and guidance published in the Handbook and in
regulatory guides, such as EG. The relevant main considerations in relation to the
action specified above are set out below.


Relevant Principle

6.
Principle 11 requires a firm to deal with its regulators in an open and co-operative way,
and to disclose to the Authority appropriately anything relating to the firm of which the
Authority would reasonably expect notice.

Guidance concerning the Threshold Conditions

7.
Guidance on the Threshold Conditions is set out in COND.





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, and those persons with whom the firm has close links, to
enable it to determine whether the firm 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 the Supervision manual in the Handbook
on the provision of information to the Authority.


Threshold Condition 2E: Suitability

9.
COND 2.5.2G states that the Authority will 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.

10.
COND 2.5.4G(2)(a) 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.

11.
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 (COND 2.5.6G(1)); or

•
the firm has contravened, amongst other things, any provision of the regulatory
system, which includes the Principles and other rules (COND 2.5.6G(4)).


OTHER RELEVANT REGULATORY PROVISIONS

12.
The Authority’s policy in relation to its enforcement powers is set out in EG, the relevant
provisions of which are summarised below.


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

13.
EG 8.1.1(1) provides that the Authority may use its own initiative power to vary or
cancel the Part 4A permission of an authorised person under section 55J of the Act
where the person is failing or is likely to fail to satisfy the Threshold Conditions for
which the Authority is responsible.

14.
EG 8.5.1(1) states that the Authority will consider cancelling a firm’s Part 4A permission
using its own initiative power contained in section 55J of the Act in circumstances
where the Authority has very serious concerns about the firm, or the way its business
is or has been conducted.

15.
EG 8.5.2 provides examples of the types of circumstances in which the Authority may
cancel a firm’s Part 4A permission. These include failure to provide the FCA with valid
contact details or failure to maintain the details provided, such that the FCA is unable
to communicate with the firm (EG 8.5.2(6), repeated failures to comply with rules and
requirements (EG 8.5.2(7) and provide material information or take remedial action
reasonably required by the FCA (EG 8.5.2(8)(b)).