FINAL NOTICE

TAKE NOTICE: the FSA of 25 The North Colonnade, Canary Wharf, London E14
5HS has taken the following action.

1.
ACTION

1.1.
For the reasons listed below, and pursuant to section 45 of the Act, the FSA has

cancelled P3’s Part IV permission to carry on regulated activities.

1.2.
On 25 February 2012, P3 exercised its right to make a reference to the Tribunal about

the matters contained in the Decision Notice. On 16 March 2012, P3 withdrew that

reference and the Tribunal consented to the withdrawal on 11 April 2012.

Accordingly, this order takes effect from 24 April 2012.

2.
REASONS FOR THE ACTION

2.1.
The FSA has concluded, on the basis of the facts and matters set out in paragraph 5

below, that P3 failed, or was likely to fail, to satisfy the Threshold Conditions.

3.
DEFINITIONS

3.1.
The definitions below are used in this Decision Notice.

(1)
“the Act” means the Financial Services and Markets Act 2000

(2)
“the FSA” means the Financial Services Authority

(3)
“Mr O’Donnell” means Patrick Francis O’Donnell

(4)
“P3” means P3 Wealth Management Limited

(5)
“P3’s Part IV permission” means P3’s permission granted pursuant to Part IV

of the Act

(6)
“Threshold Conditions” means the threshold conditions set out in Schedule 6

to the Act

(7)
“The Tribunal” means the Upper Tribunal (Tax and Chancery Chamber).

4.
RELEVANT STATUTORY PROVISIONS, REGULATORY REQUIREMENTS

AND GUIDANCE

4.1.
The statutory provisions, regulatory requirements and guidance relevant to this Notice

are set out in Annex A.

5.
FACTS AND MATTERS RELIED ON

5.1.
By a Final Notice dated 24 April 2012 issued to Mr O’Donnell, the sole approved

person at P3, the FSA has:

(1)
imposed a financial penalty of £60,000 pursuant to section 66 of the Act in

respect of Mr O’Donnell’s contravention of Principles 2 and 7 of the FSA’s

Statements of Principle and Code of Practice for Approved Persons;

(2)
withdrawn Mr O’Donnell’s approval to perform controlled functions in

relation to P3 pursuant to section 63 of the Act; and

(3)
made an order, pursuant to section 56 of the Act, prohibiting Mr O’Donnell

from performing any function in relation to any regulated activity carried on

by any authorised person, exempt person or exempt professional firm because

he is not a fit and proper person in that he lacks the necessary competence and

capability to continue as an approved person. This order takes effect on 24

April 2012.

6.
REPRESENTATIONS, FINDINGS AND CONCLUSIONS

Representations

6.1.
Mr O’Donnell made representations on his own behalf and so far as relevant, on

behalf of P3. No independent representations were made by P3. The lack of separate

representations from P3 reflects the fact that the FSA’s decision to cancel P3 was

dependant upon the FSA’s decision in relation to Mr O’Donnell (as the sole approved

person at P3).

6.2.
As a consequence of the Final Notice given to Mr O’Donnell the FSA has decided

that P3 does not have adequate human resources in relation to the regulated activities

it seeks to carry on.

6.3.
Having regard to all the circumstances, including P3’s connection with Mr O’Donnell

and the overall need to ensure that its affairs are conducted soundly and prudently, the

FSA considers that P3 does not have competent and prudent management and cannot

demonstrate that it conducts or will conduct its affairs with the exercise of due skill,

care and diligence in compliance with proper standards. It is therefore unable to meet

Threshold Condition 5.

6.4.
Further, as the FSA has concluded that Mr O’Donnell is not fit and proper, P3 failed,

or was likely to fail, to satisfy Threshold Condition 4, in that, in the opinion of the

FSA, the firm does not have adequate resources in relation to the regulated activities

it seeks to carry on or carries on. Specifically, P3 does not have adequate human

resources.

6.5.
In the light of the foregoing the FSA has concluded that P3 failed to meet Threshold

Conditions 4 (Adequate Resources) and 5 (Suitability) and that it will continue to fail

to meet these conditions.

7.
SANCTION

7.1.
As P3 failed and was likely to continue to fail to satisfy Threshold Conditions 4 and 5,

the FSA has decided to cancel its Part IV permission.

8.
PROCEDURAL MATTERS

Decision maker

8.1.
The decision which gave rise to the obligation to give this Notice was made by the

Regulatory Decisions Committee.

8.2.
This Final Notice is given to P3 in accordance with section 390 of the Act.

8.3.
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 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.

8.4.
The FSA intends to publish such information about the matter to which this Final

Notice relates as it considers appropriate.

FSA contacts


8.5.
For more information concerning this matter generally, contact Rachel West (direct

line: 020 7066 0142 /fax: 020 7066 0143) of the Enforcement and Financial Crime

Division of the FSA.

………………………………………………
Tom Spender
FSA Enforcement and Financial Crime Division

ANNEX A

1.
RELEVANT STATUTORY PROVISIONS, REGULATORY REQUIREMENTS
AND GUIDANCE

1.1.
Section 41 and Schedule 6 to the Act set out the Threshold Conditions which are

conditions that the FSA must ensure a firm will satisfy, and continue to satisfy, in

relation to regulated activities for which it has permission.

1.2.
Paragraph 4 of Schedule 6 to the Act states that the resources of the person concerned

must, in the opinion of the FSA, be adequate in relation to the regulated activities that

he seeks to carry on or carries on (Threshold Condition 4: Adequate Resources).

1.3.
Paragraph 5 of Schedule 6 to the Act states that the person concerned must satisfy the

FSA that he is a fit and proper person having regard to all the circumstances including

(a) his connection with any person; (b) the nature of any regulated activity that he

carries on or seeks to carry on; and (c) the need to ensure that his affairs are

conducted soundly and prudently (Threshold Condition 5: Suitability).

1.4.
The FSA is authorised, pursuant to section 45(2) of the Act, to cancel an authorised

person's Part IV permission where it appears that an authorised person is failing, or

likely to fail, to satisfy the Threshold Conditions.

2.
FSA’s policy on exercising it power to cancel a Part IV permission

2.1.
The FSA’s policy on exercising its power to cancel a Part IV permission is set out in

Chapter 8 of the Enforcement Guide ("EG").

2.2.
EG 8.13(1) states that the FSA will consider cancelling a firm’s Part IV permission in

circumstances including where the FSA has very serious concerns about a firm, or the

way its business is or has been conducted.

2.3.
EG 8.14 sets out general grounds for the exercise of the section 45 power to cancel a

Part IV permission. It states that the grounds on which the FSA may exercise its

power to cancel an authorised person’s permission under section 45 of the Act are set

out in section 45(1) (which includes, where it appears to the FSA that the authorised

person is failing, or is likely to fail, to satisfy the threshold conditions in relation to

7


one or more, or all, of the regulated activities for which the authorised person has Part

IV permission).

3.
Guidance on Threshold Condition 4: Adequate resources (Paragraph 4, Schedule

6 to the Act) – COND 2.4

3.1.
COND gives guidance on the Threshold Conditions set out in Schedule 6 to the Act

(COND 1.2.1G).

3.2.
COND 2.4.1UK states that the resources of the person concerned must, in the opinion

of the FSA, be adequate in relation to the regulated activities that he seeks to carry on,

or carries on.

3.3.
COND 2.4.2G(2) provides that the FSA will interpret the term 'adequate' as meaning

sufficient in terms of quantity, quality and availability, and 'resources' as including all

financial resources, non-financial resources and means of managing its resources such

as, for example, human resources and effective means by which to manage risks.

3.4.
COND 2.4.3G(1) provides that when assessing this Threshold Condition, the FSA

may have regard to any person appearing to it to be, or likely to be, in a relevant

relationship with the firm, in accordance with section 49 of the Act (Persons

connected with an applicant); for example, a firm's controllers, its directors or

partners, other persons with close links to the firm, and other persons that exert

influence over the firm which might pose a risk to the firm's satisfaction of the

Threshold Conditions and would, therefore, be in a relevant relationship with the firm.

3.5.
COND 2.4.4G(1) states that the FSA will have regard to all relevant matters which

includes at (d) whether the firm has taken reasonable steps to identify and measure

any risks of regulatory concern that it may encounter in conducting its business and

has installed appropriate systems and controls and appointed appropriate human

resources to measure them prudently at all times.

3.6.
COND 2.4.5G states that in complying with SYSC 5 (Systems and controls), a firm

should plan its business appropriately so that it is able to identify, measure and

manage the likely risks of regulatory concern it will face.

4.
Guidance concerning Threshold Condition 5: Suitability (paragraph 5, Schedule

6 to the Act) – COND 2.5

4.1.
COND 2.5.1UK states that the person concerned must satisfy the FSA that he is a fit

and proper person having regard to all the circumstances including (a) his connection

with any person; (b) the nature of any regulated activity that he carries on or seeks to

carry on; and (c) the need to ensure that his affairs are conducted soundly and

prudently.

4.2.
COND 2.5.2G(1) provides that Threshold Condition 5 requires the firm to satisfy the

FSA that it is 'fit and proper' to have Part IV permission having regard to all the

circumstances, including its connection with other persons, the range of its regulated

activities and the overall need to be satisfied that its affairs are and will be conducted

soundly and prudently.

4.3.
COND 2.5.3G(1) further provides that the emphasis of the Threshold Conditions is on

the suitability of the firm itself (the suitability of each person who performs a

controlled function will be assessed by the FSA under the approved persons regime).

However, COND 2.5.3G(2) permits the FSA, when assessing this Threshold

Condition in relation to a firm, to have regard to any person appearing to it to be, or

likely to be, in a relevant relationship with the firm, as permitted by section 49 of the

Act (Persons connected with the applicant). The guidance in COND 2.5.3G(2) also

refers to COND 2.4.3G, which sets out examples of persons in a relevant relationship

with the firm, including a firm's controllers, its directors or partners, other persons

with close links to the firm and other persons that exert influence on the firm which

might pose a risk to the firm's satisfaction of the Threshold Conditions and would,

therefore, be in a relevant relationship with the firm.

4.4.
COND 2.5.4G provides that in determining whether the firm will satisfy and continue

to satisfy Threshold Condition 5, the FSA will have regard to all relevant matters

arising including whether a firm has or will have a competent and prudent

management (COND 2.5.4G(2)(b)) and whether it can demonstrate that it conducts,

or will conduct, its business with integrity, with due skill, care and diligence and in

compliance with proper standards (COND 2.5.4G(2)(a) and (c)).

4.5.
COND 2.5.6G, in giving guidance on the interpretation of whether a firm will satisfy

and continue to satisfy Threshold Condition 5 in respect of conducting its business

with integrity and in compliance with proper standards, gives examples of relevant

matters which include:

(1)
whether the firm has been open and co-operative in all its dealings with the

FSA, and is ready willing and organised to comply with the requirements

under the regulatory system (COND 2.5.6G(1));

(2)
whether the firm has contravened, or is connected with any person who has

contravened any provisions of the Act or the regulatory system (COND

2.5.6G(4)); and

(3)
whether the firm has taken reasonable care to establish and maintain effective

systems and controls for compliance with applicable requirements and

standards under the regulatory system applicable to it (COND 2.5.6G(6)).

4.6.
COND 2.5.7G provides guidance on the matters that are relevant to determining a

firm satisfying and continuing to satisfy Threshold Condition 5 in respect of it having

competent and prudent management and exercising due skill, care and diligence.

Such matters include whether the firm has conducted enquiries that are sufficient to

give it reasonable assurance that it will not be posing unacceptable risks to consumers

or the financial system (COND 2.5.7G(9)).