FSA has imposed orders banning two directors from performing, respectively, any regulated activity or any significant influence function except as or through an appointed representative following failings related to unregulated collective investment schemes (UCIS). The directors worked for MNFA Limited, which went into liquidation in 2009. The firm specialised in sophisticated mortgage brokerage and services to non-domiciled investors. Richard Rhys was responsible for the business development side of the firm. He argued he had relied on another approved person when deciding that the scheme he was promoting was not a UCIS. He also argued that participants entered into the transaction through an execution-only service. FSA found he had:
- failed to conduct proper due diligence on the scheme’s regulatory status;
- made statements that risked misleading investors; and
- not complied with requirements for promoting UCIS nor assessed the suitability of the firm’s advice to customers, who clearly relied on what the director was telling them about the features of the investment.
Anthony Adams, who was also a director and the compliance officer, failed to understand the restrictions on promoting UCIS and to ensure the monitoring of the sale process. The Final Notices examine when investments such as those the firm promoted are collective investment schemes.(Source: Final Notice Richard Rhys and Final Notice Anthony Adams)