FINAL NOTICE

ACTION

1.
By an application dated 30 November 2015 Seclo Limited (“Seclo”) applied under
section 55A of the Financial Services and Markets Act 2000 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 refused the Application.

SUMMARY OF REASONS

4.
By its Warning Notice dated 28 October 2016 the Authority gave notice that it
proposed to refuse the Application and that
Seclo was entitled to make
representations to the Authority about that proposed action.

5. As no representations have been received by the Authority from Seclo 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 29 November 2016, the Authority gave Seclo notice
that it had decided to take the action described above.

7. Seclo 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
of 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 Seclo Final Notice of its refusal.

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

10. Seclo has failed to respond to three separate requests for the provision of
information considered, by the Authority, to be necessary to allow the Application
to be determined. These requests were made over an 11 week period; each
request included a statement to the effect that Seclo must contact the Authority
or face a Warning Notice.

11. The Authority determined the Application based upon the information received to
date, in circumstances where its requests for information have not been met.
Having reviewed that information, the Authority cannot ensure that Seclo
satisfies, and will continue to satisfy, the threshold conditions.

12. Authorised firms (and those seeking authorisation) are expected to engage with
the Authority in an open and cooperative way. The failure to provide the
requested information raises concerns that Seclo would fail to do so if the
Application were to be granted.

13. The failure to provide the information raises concerns as to whether Seclo:

i.
can be effectively supervised by the Authority as required by threshold
condition 2C;

ii.
has appropriate human resources, given Seclo's failure to provide the
Authority with the requested information as required by threshold condition
2D; and

iii.
will conduct its business with integrity and in compliance with proper
standards as required by threshold condition 2E.

DEFINITIONS

14. The definitions below are used in this Final Notice.

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

“the Application” means the application referred to in paragraph one above.

“the Authority” means the body corporate previously known as the Financial
Services Authority and renamed on 1 April 2013 as the Financial Conduct
Authority.

“Authorisations” means the Authorisations Division at the Authority.

“the Decision Notice” means the decision notice dated 29 November 2016 given
to Seclo by the Authority.

“the RTC” means the Authority’s Regulatory Transactions Committee.

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

“the Warning Notice” means the warning notice dated 28 October 2016 given to
Seclo by the Authority.

FACTS AND MATTERS

15. The Application was received on 30 November 2015.

16. Further information was requested from Seclo under section 55U(5) of the Act.

17. Details of all the relevant communications between the Authority and Seclo are
set out below.

18. On 13 July 2016 Seclo was asked to provide the following information in support
of the Application by 22 July 2016:

i.
to review and where necessary amend their website to ensure that it is
compliant with CONC 3.2, 3.3 and 3.7;

ii.
to review and where necessary amend their website to ensure that the
firm’s status as a credit broker is sufficiently prominent;

iii.
to confirm the identities of the controllers of Seclo and to submit any
outstanding controller forms;

iv.
to confirm the current number of staff at the firm;

v.
to confirm whether the expected customer income figure was correct;

vi.
to specify the sources of consumer information set out on the firm’s website
and to clarify how the accuracy of that information could be verified;

vii.
to confirm whether the firm had sought legal advice regarding its business
model and website and if so to set out the source of that advice;

viii.
to set out the firm’s expected income from regulated activities;

ix.
to provide a copy of the complaints policy;

x.
to provide a copy of the vulnerable customer policy;

xi.
to produce copies of financial forecasts; balance sheets and monthly cash
flow information for the firm;

xii.
to specify the broker to whom Seclo would be referring customers and to
clarify whether the broker was authorised by the Authority. Further, to
clarify how Seclo had formed a relationship with the preferred broker; and

xiii.
to explain the path of consumer data once it was entered onto the online
form on Seclo’s website.

19. After two weeks Authorisations had still received no substantive response to their
request for information.

20. On 22 August 2016 Authorisations wrote to Seclo informing it that a failure to
provide the information would result in the Application being determined based
upon the information
received to date and that this would result in a
recommendation to the Authority’s RTC that it issue Seclo with a Warning Notice
proposing to refuse the Application. No response was received to this letter by the
stated deadline of 2 September 2016 (i.e. within 10 working days).

21. On 2 September 2016 Authorisations wrote to Seclo, noting the lack of a
response to its previous letters of 13 July and 22 August 2016 and reiterating
that a failure to provide the information would result in the Application being
determined based upon the information received to date. The letter again noted
that a failure to reply might result in a recommendation to the Authority’s RTC
that it issue Seclo with a Warning Notice proposing to refuse the Application. No
response was received to this letter by the stated deadline of 16 September 2016
(i.e. within 10 working days).

22. On 19 September 2016 Authorisations wrote to Seclo, noting the lack of a
response to its previous letters of 13 July, 22 August and 2 September 2016 and
reiterating that a failure to provide the outstanding information would result in
the Application being determined based upon the information received to date.
The letter again noted that this would result in a recommendation to the
Authority’s RTC that it issue Seclo with a Warning Notice proposing to refuse the
Application. No response was received to this letter by the stated deadline of 3
October 2016 (i.e. within 10 working days).

23. The Authority received no response to any of the communications set out above.

IMPACT ON THRESHOLD CONDITIONS

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

25. Seclo has failed to respond to three separate requests for the provision of the
information considered, by the Authority, to be necessary to allow the Application
to be determined. These requests were made over an 11 week period; each
request included a statement to the effect that Seclo must contact the Authority
or face a Warning Notice.

26. The Authority
must therefore determine the Application based upon the
information received to date, in circumstances where its requests for information
have not been met. Having reviewed that information, the Authority cannot
ensure that Seclo satisfies, and will continue to satisfy, the threshold conditions.

27. Authorised firms (and those seeking authorisation) are expected to engage with
the Authority in an open and cooperative way. The failure to provide the
requested information raises concerns that Seclo would fail to do so if the
Application were to be granted.

28. The failure to provide the information raises concerns as to whether Seclo:

i.
can be effectively supervised by the Authority as required by threshold
condition 2C;

ii.
has appropriate human resources, given Seclo's failure to provide the
Authority with the Information as required by threshold condition 2D; and

iii.
will conduct its business with integrity and in compliance with proper
standards as required by threshold condition 2E.

29. On the basis of the facts and matters described above, in particular the failure to
provide the information sought, the Authority has concluded that it cannot ensure
that Seclo will satisfy, and continue to satisfy, the threshold conditions in relation
to all of the regulated activities for which Seclo would have permission if the
application was granted.

IMPORTANT NOTICES

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

31. 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.

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

Authority contacts

33. For more information concerning this matter generally, contact John Battram,
Manager, Lending and Intermediaries Department at the Authority (direct line:
020 7066 1252/ email: john.battram@fca.org.uk).

Hilary Bourne
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 a Part 4A permission, the
Authority must have regard to guidance published in the Authority’s Handbook,
including the part titled Threshold Conditions (“COND”). The main considerations
in relation to the action specified are set out below.

5.
COND 1.3.2G(2) states 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.

6.
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.

7.
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.

8.
COND 2.4.2G(2) states that the Authority will interpret the term 'appropriate' as
meaning sufficient in terms of quantity, quality and availability, and 'resources' as
including all financial resources (though only in the case of firms not carrying on,
or seeking to carry on, a PRA-regulated activity), non-financial resources and
means of managing its resources; for example, capital, provisions against
liabilities, holdings of or access to cash and other liquid assets, human resources
and effective means by which to manage risks.

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: Adequate Resources

10. COND 2.4.2G(2) states that the Authority will interpret the term 'appropriate' as
meaning sufficient in terms of quantity, quality and availability, and 'resources' as
including all financial resources (though only in the case of firms not carrying on,
or seeking to carry on, a PRA-regulated activity), non-financial resources and
means of managing its resources; for example, capital, provisions against
liabilities, holdings of or access to cash and other liquid assets, human resources
and effective means by which to manage risks.

11. COND 2.4.2G(3) states that high level systems and control requirements are in
SYSC. The Authority will consider whether the firm is ready, willing and organised
to comply with these and other applicable systems and controls requirements
when assessing if it has appropriate non-financial resources for the purpose of the
threshold conditions set out in threshold condition 2D.

Threshold condition 2E: Suitability

12. 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.

13. COND 2.5.4G(2)(c) 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.

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 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 (such as the detailed requirements of
SYSC and, in relation to a firm not carrying on, or seeking to carry on, a PRA-
regulated activity only, the Prudential Standards part of the Authority’s
Handbook) in addition to other legal, regulatory and professional obligations; the
relevant requirements and standards will depend on the circumstances of each
case, including the regulated activities which the firm has permission, or is
seeking permission, to carry on.