FINAL NOTICE

ACTION

1. By way of an application dated 5 December 2014 (“the Application”), Knight
Home Improvements Limited (“KHIL”) 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 decided to refuse the Application.

SUMMARY OF REASONS

4. By its Warning Notice dated 17 August 2015 (“the Warning Notice”) the
Authority gave notice that it proposed to refuse the Application and that KHIL was
entitled to make representations to the Authority about that proposed action.

5. As no representations have been received by the Authority from KHIL 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 dated 15 October 2015 (“the Decision Notice”), the
Authority gave KHIL notice that it had decided to take the action described above.

7. KHIL 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 or 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 KHIL Final Notice of its refusal.

9. The Authority decided to refuse the Application and to give this Final Notice as
KHIL has failed to provide the information required by the Authority and, in the
absence of the information sought, the Authority cannot ensure that KHIL will
satisfy, and continue to satisfy, the threshold conditions set out in Schedule 6 of
the Act.

DEFINITIONS

10. The definitions below are used in this Final 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.

FACTS AND MATTERS

11. The Application was received on 5 December 2014.

12. Further information was requested from KHIL under section 55U(5) of the Act.
Details of the relevant communications between the Authority and KHIL are set
out below:

a)
On 5 December 2014, the Part 4A application of KHIL was received by the
Authority.

b)
On 11 December 2014, the Authority sent an email to Mr Thomas Knight
(“Mr Knight”), the director of KHIL, who had confirmed he was authorised
to make the Application on behalf of the firm. The email acknowledged
receipt of the Application and advised that the case had been allocated to
a case officer. The email informed KHIL that an initial review of the
Application would be carried out and that it might be necessary to contact
the firm for additional information.

c)
On 22 December 2014, the Authority sent an email to Mr Knight
confirming that the interim permission was applicable only for Knight
Trade Services Limited, that KHIL was scheduled for an application period
in late 2015, and that the Authority would need to check the status of the
application periods for both of these firms. The Authority asked what the
firm understood the position to be regarding its application period, and
gave a deadline of 5 January 2015 for them to provide the information.

d)
On 5 January 2015, Mr Knight contacted the Authority and explained that
he wanted KHIL to be authorised as soon as possible, otherwise the firm
could not trade properly. Mr Knight explained that the firm would enter
customers’ domestic premises to measure up and do the pricing for
conservatory installations, and would also discuss finance arrangements
there.

e)
On 6 January 2015, the Authority attempted to contact Mr Knight by
telephone but was informed he was unavailable as he was out of the
office.

f)
On 6 January 2015, the Authority sent an email to Mr Knight, which
confirmed that the Application for KHIL could be processed despite falling
outside the designated application period, and advised that any consumer
credit agreements entered into by KHIL would be unenforceable as the
firm did not have interim permission. Therefore, the Authority asked the
firm:

i.
whether it had entered into any consumer credit agreements since
April 2014; and

ii.
to amend the name on the Interim Permission Consumer Credit
Register back to Knight Trade Services Limited.

In the same email, the Authority also advised that KHIL would need full
permission, as it was considered a domestic premises supplier, and
provide details of the additional application requirements and increased
fee. The Authority requested the following information by 13 January
2015:

iii.
whether the firm now wanted to apply for full permission credit
broking;

iv.
confirmation that Mr Knight was the sole director and controller of
Knight Home Improvements Limited;

v.
confirmation of the consumer credit income for the firm; and

vi.
whether or not the declared County Court Judgment of 2009
against Mr Knight was satisfied.

g)
On 9 January 2015, the Authority emailed Mr Knight asking for information
concerning the liquidation of Knight Trade Services Limited, in particular
the amount of any debts owed to suppliers and/or consumers. The
Authority gave a deadline of 13 January 2015 to provide the information
requested.

h)
On 9 January 2015, the Authority received an email from Mr Knight saying
that he wanted to withdraw the Application and requesting that the
Authority refund the application fee.

i)
On 9 January 2015, the Authority emailed Mr Knight informing him that its
policy was not to provide refunds and that the withdrawal of the
Application would be processed.

j)
On 9 January 2015, the Authority received an email from Mr Knight saying
that, as the application fee would not be refunded, he was now applying
for full permission, and that he would forward to the Authority the
required information on 12 January 2015.

k)
On 9 January 2015, the Authority emailed Mr Knight acknowledging the
firm’s decision to proceed with a full permission application. A link was
provided to the supplementary form on the Authority’s website, details of
how he could pay the top-up fee, and the Authority requested confirmation
that Mr Knight would convert his application for controlled function CF8
(apportionment and oversight) to CF1 (director). The Authority reminded
Mr Knight that he was yet to provide the information requested in the
Authority’s emails of 6 January and 9 January 2015 (“the information
requested”).

l)
On 28 January 2015, the Authority telephoned Mr Knight, who explained
that he had been unwell and in hospital and hoped to amend the
Application within the following week or so. The Authority undertook to
phone Mr Knight on 6 February 2015 if no response had been received
from him by then.

m)
On 10 February 2015, the Authority emailed Mr Knight asking when he
would be in a position to submit the information requested.

n)
On 13 February 2015, the Authority attempted to speak to Mr Knight and
was informed that he was on leave until 23 February 2015.

o)
On 13 February 2015, the Authority emailed Mr Knight requesting that he
submit the supplementary form and fee by 27 February 2015.

p)
On 20 March 2015, the Authority telephoned Mr Knight on the office
number. He confirmed that he would not change his business model and
would submit a full permission application. The Authority emailed him the
same day to confirm the call and giving him a deadline of 3 April 2015 for
submission of the information requested.

q)
On 7 April 2015, the Authority attempted to speak to Mr Knight and left a
message asking for the call to be returned requesting that he contact the
Authority by 8 April 2015.

r)
On 10 April 2015, the Authority attempted to speak to Mr Knight. A
colleague answered the call and undertook to pass a message on to him
requesting that he contact the Authority. Later that day, Mr Knight’s
colleague telephoned the Authority to explain that Mr Knight was presently
busy and asked for help identifying the emails that to which the Authority
required a response. Mr Knight’s colleague undertook to print out the
relevant emails and bring them to Mr Knight’s attention.

s)
On 16 April 2015, the Authority telephoned Mr Knight, who informed the
Authority that his office was dealing with the Application and that he would
telephone with an update on 17 April 2015.

t)
On 21 April 2015, the Authority sent a letter via Special Delivery to Mr
Knight. The Authority also sent an email to Mr Knight. The Authority gave
a deadline of 28 April 2015 for Mr Knight to provide the information

requested. The email and letter stressed that failure to provide the
information might result in the case being recommended to the Authority’s
Regulatory Transaction Committee. The letter was signed for on 22 April
2015 with an illegible signature.

u)
On 30 April 2015, the Authority attempted to contact Mr Knight on the
office number and, having received no reply, sent a letter via Special
Delivery. The Authority also sent an email to Mr Knight. The Authority
gave a deadline of 8 May 2015 for Mr Knight to provide the information
requested. The letter again stressed that failure to provide information
might result in the case being recommended to the Authority’s Regulatory
Transactions Committee. The letter was signed for on 1 May 2015 with an
illegible signature.

v)
On 5 May 2015, the Authority attempted to contact Mr Knight on the office
number several times. A call to the phone number quoted on the firm’s
website was answered by Mr Knight’s colleague, and the Authority
requested that Mr Knight email with an update regarding the status of the
Application.

w)
On 18 May 2015, the Authority attempted to contact Mr Knight on the
office number three times. On the first occasion the Authority was
informed that Mr Knight was on the phone, on the second that he was out
of the office, and on the third that he had left the office and was not back
until 19 May 2015.

x)
On 18 May 2015, the Authority sent letters to Mr Knight at the office
address and his home address by Special Delivery. Both letters were
signed for on 19 May 2015 with illegible signatures. The Authority also
sent an email to Mr Knight. The Authority gave a deadline of 2 June 2015
for Mr Knight to provide the information requested. As well as highlighting
again the potential of a Warning Notice being issued, the correspondence
advised Mr Knight how to withdraw the Application should he wish to do
so.

y)
On 22 June 2015, the Authority noted that KHIL had not amended their
entry on the Interim Permission Consumer Credit Register, as requested in
the Authority’s email of 6 January 2015, to show that Knight Trade
Services Limited held interim permission as opposed to KHIL. The
Authority amended the firm’s entry and sent an email confirming this
amendment, warning that only Knight Trade Services Limited had interim
permission, and advising that the Authority was in the process of
preparing papers in order to make a recommendation to the Regulatory
Transactions Committee to issue the firm with a Warning Notice.

13. No response has been received indicating that any of the letters could not be
delivered.

14. During the above period, the Authority received five substantive responses to the
communications sent to KHIL (a telephone call on 5 January 2015, two emails on
9 January 2015, a telephone call on 28 January 2015, a telephone call on 20
March 2015). However, the information provided in these communications has
been insufficient to enable the Authority to determine the Application as KHIL has
failed to provide adequate responses to the Authority’s requests for information.

IMPACT ON THRESHOLD CONDITIONS

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

16. By virtue of KHIL’s failure to provide the requested information and, from
20 March 2015, to substantively reply at all to the Authority’s correspondence,
the Authority cannot ensure that KHIL satisfies, and will continue to satisfy, the
following threshold conditions:

2C (Effective Supervision)

i.
KHIL’s failure to provide the Authority with the requested information calls
into question whether the Authority would be able to obtain (on an
ongoing basis) sufficient information about KHIL’s activities such that the
Authority would be able to effectively supervise the firm.

2D (Appropriate Resources)

ii.
In failing to respond to the Authority’s requests and correspondence in the
manner set out above, KHIL has been unable to satisfy the Authority that
it has the appropriate human resources.

2E (Suitability)

iii.
The failure by KHIL to supply the information requested means it is not
being open and co-operative with the Authority or being ready, willing and
organised to comply in its dealings with the Authority.

17. On the basis of the facts and matters described above, in particular the failure to
provide the information required by the Authority, and in the absence of the
information sought, the Authority has concluded that KHIL will not satisfy, and
continue to satisfy, the threshold conditions in relation to the regulated activity
for which KHIL would have permission if the Application were granted.

IMPORTANT NOTICES

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

19. 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.

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

Authority contacts

21. For more information concerning this matter generally, contact Katherine
Webster, Senior Manager, Credit Authorisations Division, at the Authority (direct
line: 020 7066 4126 / email: Katherine.Webster@fca.org.uk).

Val Smith
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 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.

Principles for Businesses

5. PRIN 2.1.1R, Principle 11 states that a firm must deal with its regulators in an
open and co-operative way, and must disclose to the appropriate regulator
appropriately anything relating to the firm of which that regulator would
reasonably expect notice.

Threshold Conditions in general

6. COND 1.3.2G(2) provides 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.

7. 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.

8. 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

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 2.4.1BG states that the relevant appropriate resources for threshold
condition 2D are set out in paragraph 2D of Schedule 6 to the Act.

11. COND 2.4.2G(2) provides that, non-financial resources of the firm will include
human resources.

12. COND 2.4.2G(2A) provides that, ‘non-financial resources’ of the firm include
human resources it has available.

Threshold condition 2E: Suitability

13. 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.

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 (see Principle 11 (Relations with regulators)) and is ready, willing and
organised to comply with the requirements and standards under the regulatory
system.