1

NOTICE OF DECISION

ACTION

1.
For the reasons given below, the Authority has decided to cancel R5FXL’s Part 4A permission.
The cancellation takes effect on the date of this Notice of Decision.

2.
The effect of the cancellation is that R5FXL no longer has permission to carry on any regulated
activities.

DEFINITIONS

3.
The definitions below are used in this Notice of Decision (and in the Annex):

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

“the Authority” means the Financial Conduct Authority;


2

“DISP” means the Authority’s Dispute Resolution: Complaint’s sourcebook, part of the
Handbook;

“EG” means the Enforcement Guide;

“FDA” means the Firm Details Attestation which Authority-authorised firms are required to
submit to the Authority under SUP 16.10;

“FEES” means the Authority’s FEES Manual, part of the Handbook;

“FSCS” means the Financial Services Compensation Scheme;

“the Further Notice” means the further notice issued by the Authority to R5FXL dated 24 May
2023;

“the general levy” means the levy a firm must pay to the Authority towards the costs of
operating the compulsory jurisdiction of the Financial Ombudsman Service;

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

“the IML levy” means the Illegal Money Lending levy;

“the Notice” means the notice issued by the Authority to R5FXL dated 25 April 2023;

“Part 4A permission” means permission to conduct regulated activities, granted by the
Authority under Part 4A of the Act;

“R5FXL” means R5FX Ltd;

“R5FXL’s Part 4A permission” means the Part 4A permission granted by the Authority to
R5FXL;

“RAG” means regulated activity group as referred to in SUP;

“the Returns” means:

•
the FIN–A returns for the period from 1 January 2019 to 31 December 2021 which were
due for submission on various dates between 24 April 2020 to 27 April 2022;

•
the FSA029, FSA030, FSA031, FSA033 returns for the period from 1 January 2020 to 31
December 2022 which were due for submission on various dates between 30 April 2020
and 30 January 2023;

•
the FSA039 and Complaints returns for the period from 1 January 2020 to 31 December
2022 which were due for submission on various dates between 11 August 2020 and 13
February 2023’’;

“SFGB Levy” means the Single Financial Guidance Body Levy;

“SUP” means the Supervision Manual, part of the Handbook; and


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

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FACTS AND MATTERS

4. R5FXL was authorised by the Authority on 16 December 2014 and given a Part 4A permission
to conduct the following regulated activities in relation to designated investment business:

•
agreeing to carry on a regulated activity;
•
arranging (bringing about) deals in investments; and
•
making arrangements with a view to transactions in investments.

5.
R5FXL failed to pay periodic fees and levies owed to the Authority as required under the
Handbook under the rules set out in FEES 4.2.1R, 4.3.1R, 5.7.1R, 6.7.1R, 6.7.3R, 7A.3.1R and
13.2.1R. In particular, R5FXL failed to pay the following periodic fees and levies:

(a) an invoice dated 22 September 2020 for £1,188.38 which had been due for payment
by 21 December 2020; and

(b) an invoice dated 5 October 2021 for £1,184.89 which had been due for payment by 3
January 2022.

6.
In addition, under SUP 16.3.13R, SUP 16.7A.3R, SUP 16.12.3R, SUP 16.12.4R, SUP 16.12.12R,
SUP 16.12.25R (and the further rules specified therein) in Chapter 16 of SUP and DISP 1.10.1R,
R5FXL is required to submit the Returns to the Authority by the relevant due date. However,
R5FXL has failed to submit the Returns to the Authority by the relevant due dates.

7.
Furthermore, under SUP 16.10.4R, 16.10.4AR and 16.10.14AAR, R5FXL is required to submit
the FDA to the Authority by the relevant due date. However, R5FXL has failed to submit the
FDA to the Authority by the relevant due date.

8.
The Authority therefore considers that R5FXL has failed to provide information to the Authority
as is required by the Handbook, namely the information it is required to provide in the Returns
and the FDA. There are no other matters that suggest R5FXL is carrying on regulated activities.

9.
On 25 April 2023, the Authority gave R5FXL the Notice which stated that:

(a)
it appears to the Authority that R5FXL is carrying on no regulated activity to which its
Part 4A permission relates; and

(b)
the Authority may take action to cancel R5FXL’s Part 4A permission unless it responds to
the Notice in the manner specified in the directions to the Notice.

10.
R5FXL failed to respond to the Notice.

11.
As a result of the matters specified in paragraph 10 above, on 24 May 2023, the Authority gave
R5FXL the Further Notice which stated that:

a) the Authority considered that R5FXL is carrying on no regulated activity to which its Part
4A permission relates; and

b) the Authority proposes to cancel R5FXL’s Part 4A permission on 21 June 2023 unless
R5FXL takes the steps specified in the directions to the Further Notice.

12.
R5FXL failed to take the steps specified in the Further Notice.


CANCELLATION OF PART 4A PERMISSION

13.
From the facts and matters described above, and having regard to paragraph 1(3) of Schedule
6A to the Act, the Authority considers that R5FXL is carrying on no regulated activity to which
its Part 4A permission relates. The Authority has therefore decided to cancel R5FXL’s Part 4A
permission. The cancellation of R5FXL’s Part 4A permission takes effect from the date of this
Notice of Decision.

14.
The statutory and regulatory provisions relevant to this Notice of Decision are set out in the
Annexes.

PROCEDURAL MATTERS



15.
This Notice of Decision is given to R5FXL under paragraph 3 of Schedule 6A to the Act (variation
or cancellation of Part 4A permission on initiative of FCA: additional power).

The following paragraphs are important.

Annulment of the Authority’s decision

16.
If R5FXL is aggrieved by the decision to cancel its Part 4A permission as set out in this Notice
of Decision, R5FXL may make an application for an annulment of the Authority’s decision under
paragraph 4 of Schedule 6A to the Act.

17.
R5FXL must submit a completed application for an annulment of the Authority’s decision to the
Authority by 20 June 2024 and in the manner specified by the Authority.

The Tribunal

18.
R5FXL does not have a right to refer the decision to give this Notice of Decision to the Tribunal.

Publicity

19.
The Authority intends to publish such information about the matter to which this Notice of
Decision relates as the Authority considers appropriate. The information may be published in
such manner as the Authority considers appropriate.

Authority Contact

20. For more information concerning this matter generally, R5FXL should contact Ibrahim Ali
(direct line: 020 7066 4264).


Jeremy Parkinson
Enforcement and Market Oversight Division



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ANNEX ON CANCELLATION OF PART 4A PERMISSION ON INITIATIVE OF FCA:

ADDITIONAL POWER

RELEVANT STATUTORY PROVISIONS

1.
The Authority’s operational objectives established in section 1B of the Act include protecting
and enhancing the integrity of the UK financial system and securing an appropriate degree of
protection for consumers.

2.
The Authority is authorised by paragraphs 1(1) and (2) of Schedule 6A to the Act to cancel an
Authority-authorised person’s Part 4A permission, if it appears to the Authority that the
Authority-authorised person is carrying on no regulated activity to which the permission
relates.

3.
Paragraph 1(3) of Schedule 6A of the Act provides that the circumstances in which the Authority
may form the view that an Authority-authorised person is carrying on no regulated activity
include (but are not limited to) circumstances where the person fails—

(a)
to pay any periodic fee or levy as is required by the Handbook, or

(b)
to provide such information to the Authority as is required by the Handbook.

4.
The Authority must exercise its power to cancel an Authority-authorised person’s Part 4A
permission using its additional own initiative power in accordance with the procedure set out
in paragraph 2 of Schedule 6A to the Act.

RELEVANT HANDBOOK PROVISIONS

5.
In exercising its power to cancel an Authority-authorised person’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 main considerations relevant to the action
stated in this Notice of Decision are set out below.

Relevant Rules

6.
FEES 4.2.1R requires that:

“A person shown in column (1) of the table in FEES 4.2.11 R as the relevant fee payer
must pay each periodic fee applicable to it, calculated in accordance with the provisions
referred to in column (2) of the applicable table, as adjusted by any relevant provision
in this chapter:

(1)
in full and without deduction (unless permitted or required by a provision in
FEES); and

(2)
on or before the date given in column (3) of that table, unless FEES 4.2.10 R
applies.”

7.
FEES 4.3.1R states that:

“The periodic fee payable by a firm (except an AIFM qualifier, ICVC or a UCITS
qualifier) is:

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(1)
each periodic fee applicable to it calculated in accordance with FEES 4.3.3 R,
using information obtained in accordance with FEES 4.4; plus

(1A)
any periodic fee applicable to it calculated in accordance with FEES 4.3.3A R
using information relating to its UK business obtained in accordance with FEES
4.4 (or by other means in the case of the Bank of England); less

(2)
any deductions from the periodic fee specified in Part 2 of FEES 4 Annex 2AR
or Part 7 of FEES 4 Annex 11R.”

10.
FEES 5.7.1R requires that:


“A firm must pay annually to the [Authority] the general levy on or before the later of
1 April and 30 calendar days after the date when the invoice is issued by the
[Authority].”

11.
FEES 6.7.1R requires that:

“A participant firm that is not within FEES 6.7.-1R, must pay its share of any levy made
by the FSCS in one payment”.

12.
FEES 6.7.3R states that:

“A participant firm's share of a levy to which FEES 6.7.1R applies is due on, and payable
within 30 days of, the date when the invoice is issued.”

13.
FEES 7A.3.1R requires that:

“A firm must pay the SFGB money advice levy or SFGB debt advice levy applicable to
it:

(1)
in full and without deduction (unless permitted or required by a provision in
FEES); and

(2)
by 1 August or, if later, within 30 days of the date of the invoice in the fee year
to which that sum relates.

14.
FEES 13.2.1R requires that:

“A firm must pay each IML levy applicable to it:

(1)
in full and without deduction by 1 August (or, if later, within 30 days of the
date of the invoice) in the financial year to which the sum relates; and

(2)
in accordance with the rules in this chapter.

15.
SUP 16.3.13R(1) requires that:

“A firm must submit a report required by this chapter in the frequency, and so as to

be received by the [Authority] no later than the due date, specified for that

report.”


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16.
SUP 16.3.13R(4) states that:

“If the due date for submission of a report required by this chapter is a set period of
time after the end of a half-year, a quarter, or a month, the dates will be determined
by (a) or (b) below except where otherwise indicated:

(a) the firm's accounting reference date;

(b) monthly, 3 monthly or 6 months after the firm's accounting reference date, as the
case may be.”

17.
SUP 16.12.3R(1)(a)(ii) requires that:

“unless (iii) applies, where a firm is required to submit completed data items for
more than one RAG, that firm must only submit the data item of the same name and
purpose in respect of the lowest numbered RAG applicable to it, RAG 1 being the
lowest and RAG 12 the highest.”

18.
SUP 16.12.3R(1)(a)(iii) specifies that:

“where a firm is, but for this rule, required to submit data items for more than one
RAG and this includes the submission of data items in respect of fees, the FOS or FSCS
levy, or threshold conditions, that firm must only submit these data items if they
belong to the lowest numbered of the RAGs applicable to it.”

19.
The specific reporting requirements for R5FXL are set out in SUP (taken from SUP 16.12.4R
and DISP 1.10.1R) which stipulate the type, frequency and due date of each of the regulatory
reports which R5FXL is required to submit, according to the regulated activities which R5FXL
has permission to conduct:


RAG
Number/Basis
of reporting
requirement

Type of Return(s)
applicable

(Relevant rule)

Frequency of
data item(s) to
be submitted

(Relevant rule)

Due date of
data item(s) to
be submitted

(Relevant rule)

RAG 3
FIN-A Annual

Report and
Accounts

(SUP 16.7A.3R)

80 business days
(SUP 16.7A.8R)

RAG 3
FSA029, FSA030,

FSA031 and
FSA033

20 business days
(SUP 16.12.13R)

RAG 3
FSA039
Half yearly

30 business days
(SUP 16.12.13R)

Complaints
return
(DISP
1.10.1R(1))

(DISP 1.10.1R)





Half yearly

(DISP 1.10.1R)





30 business days
(DISP 1.10.5R)





10. SUP 16.10.4R specifies that:

“(1) Within 60 business days of its accounting reference date, a firm must check the
accuracy of its firm details through the relevant section of the [Authority] website.

[…]

(3) If any of the details are incorrect, the firm must submit the corrected firm details
to the [Authority] using the appropriate form set out in SUP 15 Ann 3 and in accordance
with SUP 16.10.4AR.”

20.
SUP 16.10.4AR(1) specifies that:

“A firm must submit any corrected firm details under SUP 16.10.14R(3) using the
appropriate online systems accessible through the [Authority’s] website.”

21.
SUP 16.10.14AAR, which applies where, in complying with SUP 16.10.14R(1), a firm does not
need to submit corrected firm details under SUP 16.10.14R(3), specifics that:

“(2) Within 60 business days of its accounting reference date, a firm must submit a
report to the [Authority] confirming that the firm details which it has checked under
SUP 16.10.14R(1) remain accurate, using the appropriate online systems accessible
through the [Authority’s] website.”




Guidance concerning the use of the Authority’s additional power to cancel an authorised
firm’s Part 4A permission on its own initiative

Guidance on the use of the Authority’s power to cancel an Authority-authorised person’s Part 4A
permissions on its own initiative under Schedule 6A to the Act is set out in SUP and EG.

22.
EG 8.5.2A states that the Authority may cancel the Part 4A permission of a firm that is an
Authority-authorised person, under Schedule 6A of the Act, if:

(1) it appears to the Authority that the firm is carrying on no regulated activity to which
the permission relates; and

(2) the firm has failed to respond as directed by the Authority to notices served by the
Authority to the firm under paragraph 2 of Schedule 6A.

23.
EG 8.5.2A also states that Schedule 6A specifies that the Authority may form the view that a
firm is carrying on no such regulated activity on the basis of its failure to pay a periodic fee or
levy or provide information to the Authority, in each case as required by the Handbook.

24.
SUP sets out further guidance on the Authority’s power under Schedule 6A of the Act. In
particular, SUP 7.2.2AG(1) states that the Authority may decide to cancel an Authority-
authorised person’s Part 4A permission using its powers under Schedule 6A of the Act:

(1) if that person appears to the Authority not to be carrying on any regulated activity to
which the permission relates, including, without restriction, if the person has failed to:

(a)
pay a periodic fee or levy under the Handbook; or

(b)
provide the Authority with information required under the Handbook; and

(2) if that person, when served by the Authority with two notices under paragraph 2 of
Schedule 6A of the Act, has not:

(a)
responded in the manner directed, in those notices or otherwise, by the
Authority; nor

(b)
taken other steps as may also be directed by the Authority;

the second of which notices will specify the effective date of the proposed cancellation.

25.
SUP 7.2.2DG states that:

(1) the Authority’s additional own-initiative variation power under Schedule 6A to the Act
(which includes the power to cancel the Part 4A permission of an Authority-authorised
firm under Schedule 6A of the Act and references to “additional own-initiative
variation power in the remainder of this Notice of Decision should be read as such)
has, unlike the Authority’s own-initiative variation power under section 55J of the
Act, a single basis: that it appears to the Authority that the relevant Authority-
authorised person is not carrying on any regulated activity to which its Part 4A
permission relates.

(2) if the Authority uses its additional own-initiative variation power, it is therefore more
likely to cancel the relevant firm’s Part 4A permission, rather than merely varying it

by removing or amending the description of one or more such activities or by
imposing one or more limitations.

(3) the Authority will, however, consider all relevant facts and circumstances, including,
without restriction:

(a) the relevant firm’s responses, if any, to the notices given by the Authority under
paragraph 2 of Schedule 6A; and

(b) if applicable, the factors described in SUP 6.4.22G, including whether there are
any matters relating to the firm requiring investigation,

before deciding whether to use its additional own-initiative variation power and whether to use
it to cancel or vary.

26.
SUP 7.2.7G(1) states that a firm has no right of referral to the Tribunal in respect of the
Authority exercising its additional own-initiative variation power, under Schedule 6A to the Act,
on the Authority-authorised firm’s Part 4A permission.