Public Statement - F.S.C

This notice is issued in accordance with section 13(4) of the Financial Services Act 2008.

The Commission issued a public statement on 2 August 2012 in which it stated, “…both industry and public should be assured that the Commission puts considerable emphasis on the suitability of financial advice and, if it encounters issues that may impact its regulatory objectives, it will utilise the various powers available to it…”.

The Commission has recently concluded a formal investigation under Schedule 2 of the Financial Services Act 2008.

As a result of this investigation four individuals have been issued with warning notices under section 11 of the Financial Services Act 2008. A warning notice issued under this section is a notice that the Commission has grounds to believe that such activities or circumstances as are specified in the notice are prejudicial to the relevant person’s fitness and propriety.

The recipients of the notices formerly held the roles of director and/or compliance officer.

The investigation undertaken caused the Commission to have concerns with regard to –

  • Weaknesses in systems and controls;
  • Absence of robust compliance arrangements;
  • Professional indemnity insurance arrangements that were not appropriate to the circumstances of the business;
  • A failure to demonstrate that financial advice was suitable to customer needs; and
  • A failure to address conflicts of interest appropriately.

Section 32 of the Financial Services Act 2008 provides that a person aggrieved by the giving of a warning notice, or the terms of such a notice, may appeal to the Financial Services Tribunal.

Enquiries to:

David Griffin
Director – Enforcement