FINAL NOTICE

To:
Ron Treherne IFA Ltd

ACTION

1.
For the reasons set out in this Final Notice, the Authority has cancelled Treherne’s Part
4A permission.

REASONS FOR THE ACTION

2.
The Authority issued to Treherne the Decision Notice which notified Treherne that for the
reasons given below and pursuant to section 55J of the Act, the Authority had decided to
cancel Treherne’s Part 4A permission.

3.
Treherne 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 Treherne’s Part 4A permission.

DEFINITIONS

5.
The definitions below are used in this Final Notice (and in the Annex):

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

“the appropriate resources Threshold Condition” means the threshold condition set out in
paragraph 2D of Schedule 6 to the Act;

“the Authority” means the Financial Conduct Authority;

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

“Consumer 1” and “Consumer 2” refer to two individual consumers who respectively sent
individual complaints to the FOS in relation to Treherne and were subsequently given the
FOS Awards;

“the Decision Notice” means the decision notice given to Ron Treherne IFA Ltd dated 21
April 2021;

“DISP” means the Dispute Resolution: Complaints Manual which is part of the Handbook;

“EG” means the Enforcement Guide;

“the FOS” means the Financial Ombudsman Service;

“the FOS Awards” means the Final Decisions made by the FOS in March 2018 against
Treherne in favour of Consumer 1 and Consumer 2;

“the first FOS Award” means the Final Decision made by the FOS in March 2018 against
Treherne in favour of Consumer 1;

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

“IPRU-INV” means the Interim Prudential Sourcebook Investment Business section of the
Handbook;

“Part 4A permission” means the permission granted to Treherne under Part 4A of the Act;

“PII” means Professional Indemnity Insurance;

“the PII Rules” means the Authority Rules IPRU-INV 13.1.5R in the IPRU-INV;

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

“the RDC” means the Regulatory Decisions Committee of the Authority;

“the second FOS Award” means the Final Decision made by the FOS in March 2018
against Treherne in favour of Consumer 2;

“SIPP” means self-invested personal pension;

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

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

2

“Treherne” means Ron Treherne IFA Ltd;

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

“VREQ” means the Voluntary Application for an Imposition of Requirement dated 13 June
2019; and

“the Warning Notice” means the warning notice given to Ron Treherne IFA Ltd dated 24
March 2021.

FACTS AND MATTERS

Non-payment of FOS awards

6.
Consumer 1’s complaint to the FOS related to the advice he received from Treherne to
transfer his existing pension into a SIPP, to mainly invest in Firm A. Consumer 1 claims
that Treherne did not adequately assess the suitability for Consumer 1 of the investment
in Firm A, and that he should not have been advised to transfer his pension into a SIPP.
The FOS Award instructed Treherne to calculate fair compensation by comparing the value
of Consumer 1’s pension (if he had not transferred into a SIPP) with the current value of
his SIPP.

7.
On 10 April 2018, Consumer 1 accepted the first FOS Award, at which stage the FOS
decision became binding on him and Treherne, which has not sought judicial review of the
FOS Award (which therefore remains binding on it under section 228(5) of the Act).
Treherne has failed to comply with the first FOS Award, despite repeated requests by the
FOS and the Authority that it do so.

8.
Consumer 2’s complaint to the FOS related to the advice he received from Treherne to
transfer his existing pension into a SIPP to mainly invest in Firm B. Consumer 2 claimed
that Treherne did not adequately assess the suitability of the investment in Firm B, and
that he should not have been advised to transfer his pension into a SIPP. The second FOS
Award instructed Treherne to pay Consumer 2 a lump sum of £132,124.47.

9.
On 5 April 2018, Consumer 2 accepted the second FOS Award, at which stage the FOS
decision became binding on him and Treherne, which has not sought judicial review of the
FOS Award (which therefore remains binding on it under section 228(5) of the Act).
Treherne has failed to comply with the second FOS Award, despite repeated requests by
the FOS and the Authority that it do so.

No evidence that PII has been obtained

10.
Treherne has failed to demonstrate that it has valid PII cover. The Authority has given
Treherne ample opportunity to provide evidence that it holds valid PII cover, but has not
received any such evidence. Treherne informed the Authority by email on 8 February 2019
that Mr Ronald Treherne had been retired for five months and no longer practiced as an
IFA, and was intending to apply for cancellation of Treherne’s Part 4A permission.
However, to date no such application to cancel Treherne’s authorisation has been
received by the Authority. This suggests that Treherne is not intending to obtain PII
cover.

3

VREQ

11.
On 26 June 2019, Treherne entered into a VREQ with the Authority, which prevented
Treherne from advising on investments, advising on P2P agreements, arranging deals in
investments business and making arrangements for investment business.

FAILINGS

12.
The Authority has concluded, on the basis of the facts and matters described above, that
Treherne is failing to satisfy the suitability Threshold Condition, in that the Authority is
satisfied that Treherne is not a fit and proper person having regard to all the
circumstances. In the opinion of the Authority, Treherne has failed to satisfy the
Authority that it is conducting its affairs in an appropriate manner, having regard in
particular to the interests of consumers. Specifically, Treherne has failed to comply with
the FOS Awards made against it, despite repeated requests by the FOS and the Authority
that it do so. By not complying with the FOS Awards, Treherne has breached DISP
3.7.12R(1) and Principle 6 (Customers’ interests) and Principle 11 (Relations with
regulators) of the Principles.

13.
Further, Treherne has failed to provide evidence that it has PII. Treherne therefore appears
to be failing to satisfy the appropriate resources Threshold Condition.

14.
Accordingly, the Authority considers that Treherne’s Part 4A permissions should be
cancelled.

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

Annex.

REPRESENTATIONS

16.
Through the Warning Notice, the Authority gave notice that it proposed to take the action
described above and Treherne was given the opportunity to make representations to the
Authority about that proposed action.

17.
Following receipt of the Warning Notice, Treherne informed the Authority that it did not
agree with the proposed action, and refuted the claims made by Consumer 1 and
Consumer 2, but it did not intend to appeal the decision.

18.
The Authority has therefore decided to cancel Treherne’s Part 4A permission for the
reasons described above.

PROCEDURAL MATTERS

19.
This Final Notice is given to Treherne in accordance with section 390(1) of the Act.

20.
The following paragraphs are important.

Decision Maker

21.
The decision which gave rise to the obligation to give this Final Notice was made by the
Chair of the RDC.

22.
The Authority must publish such information about the matter to which this Final Notice
relates as it considers appropriate. This information may be published in such a 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
Treherne or prejudicial to the interests of consumers.

23.
The Authority intends to publish such information about the matter to which this Final
Notice relates as it considers appropriate.

24.
For more information concerning this matter generally, please contact Saad Nasarullah of
the Enforcement & Market Oversight Division at the Authority (direct line: 020 7066
1940).

Anna Couzens
Manager, Threshold Conditions Team
Enforcement and Market Oversight Division
Financial Conduct Authority

5

ANNEX

RELEVANT STATUTORY PROVISIONS

1.
The Authority’s operational objectives established in section 1(B) of the Act include
securing an appropriate degree of protection for consumers.

2.
The Authority is authorised by section 55J of the Act to cancel an authorised person’s
Part 4A permission, where it appears to the Authority that it is failing to satisfy the
Threshold Conditions.

3.
Section 228(5) of the Act provides that if the complainant notifies the FOS that they
accept the determination, it is binding on the respondent and the complainant, and is
final.

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

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

(c)
the need to ensure that A’s affairs are conducted in an appropriate manner,
having regard in particular to the interests of consumers

(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.”

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

6.
DISP 3.7.12R(1) requires that a respondent (Treherne is a respondent under the
definition given in the Handbook) complies promptly with any award or direction made
by the FOS.

7.
Principle 6 (Customers’ interests) of the Principles requires a firm to pay due regard to
the interests of its customers and treat them fairly.

8.
Principle 11 (Relations with regulators) of the Principles states that a firm must deal with
its regulators in an open and co-operative way, and must disclose to the appropriate
regulator anything relating to the firm of which that regulator would reasonably expect
notice.

Relevant Rule PII cover

6

9.
Between 1 October 2018 and 31 December 2020, the PII Rules required that:

“A firm must take out and maintain at all times professional indemnity insurance
that is at least equal to the requirements in this section from:

(1)
an
insurance
undertaking
authorised
to
transact
professional

indemnity insurance in the EEA; or

(2)
a person of equivalent status in:

(a)
a Zone A country;

(b)
the Channel Islands, Gibraltar, Bermuda or the Isle of Man.”

10.
From 1 January 2021, the PII Rules require that:

“A firm must take out and maintain at all times professional indemnity insurance
that is at least equal to the requirements in this section from:

(1)
an
insurance
undertaking
authorised
to
transact
professional

indemnity insurance in the UK; or

(2)
a person of equivalent status in:

(a)
a Zone A country;

(b)
the Channel Islands, Gibraltar, Bermuda or the Isle of Man.”

Guidance concerning the Threshold Conditions

11.
Guidance on the Threshold Conditions is set out in the part of the Handbook entitled
Threshold Conditions (“COND”).

COND 2.4 Appropriate resources: Paragraph 2D of Schedule 6 to the Act

12.
COND 2.4.1AUK(1) reproduces the relevant statutory provision that the resources of the
person concerned must be appropriate in relation to the regulated activities that it carries
on or seeks to carry on.

13.
COND 2.4.1AUK(3)(a) states that the matters which are relevant in determining whether
a firm has appropriate financial resources include the provision the firm makes in respect
of liabilities.

14.
COND 2.4.2G(2) provides that, in this context, the Authority will interpret the term
‘appropriate’ 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; for example, capital, provisions against liabilities, holding of or
access to cash and other liquid assets, human resources and effective means by which
to manage risks.

15.
COND 2.4.4G(2) provides that the relevant matters to which the Authority may have

7

regard when assessing whether a firm will satisfy, and continue to satisfy, the appropriate
resources threshold condition may include whether the firm is likely to have difficulties in
complying with any of the Authority’s prudential rules (COND 2.4.4G(2)(a)).

COND 2.5 – Suitability: Paragraph 2E of Schedule 6 to the Act

16.
COND 2.5.1AUK reproduces the relevant statutory provision that a person concerned
must be a fit and proper person having regard to all the circumstances, including,
amongst other things, whether its business is being managed in such a way as to ensure
that its affairs will be conducted in a sound and prudent manner.

17.
COND 2.5.1BG confirms that paragraph 2E of Schedule 6 to the Act sets out the suitability
Threshold Condition for firms carrying on, or seeking to carry on, regulated activities
which do not consist of or include a PRA-regulated activity.

18.
COND 2.5.2G states that the Authority will take into consideration anything that could
influence a firm’s continuing ability to satisfy the suitability Threshold Condition.

19.
COND 2.5.6G gives 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, the suitability Threshold Condition including, but not limited to, whether:

•
the firm has been open and co-operative in all its dealings with the Authority
and is ready, willing and organised to comply with the requirements and
standards under the regulatory system (COND 2.5.6G(1)); and

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

OTHER RELEVANT REGULATORY PROVISIONS

20.
The Authority's policy in relation to its enforcement powers is set out in the Enforcement
Guide (EG), certain provisions of which are summarised below.

21.
EG 8.1.1(1) reflects the provisions of section 55J of the Act that the Authority may use
its own-initiative power to vary or cancel the permission of an authorised firm where a
firm is failing or is likely to fail to satisfy the threshold conditions.

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

22.
The Authority’s policy in relation to its enforcement powers is set out in EG.

23.
EG 8.1.1(1) provides that the Authority may use its own initiative power to vary or cancel
the 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.

24.
EG 8.5.1(1) states that the Authority will consider cancelling a firm’s Part 4A permission
using its own initiative powers 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.

25.
EG 8.5.2 provides examples of the types of circumstances in which the Authority may

cancel a firm’s Part 4A permission and EG 8.5.2(1) specifies that non-compliance with an
award made by the FOS against a firm is one such circumstance.