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Tribunal overrules FSA decision on authorisation

The Financial Services and Markets Tribunal has overruled the FSA’s decision to dismiss an application made by a mortgage broker for authorisation.

In October 2006 Barket Financial Management applied for Part IV permission to carry out various regulated activities. BFM also applied for the approval of a Mr Ahmed to perform controlled functions.

In December 2007 the FSA issued two decision notices refusing both applications.

The FSA concluded that it could not ensure that Ahmed was a fit and proper person to perform controlled functions and therefore BFM’s application was also refused.

The regulator contended that the applications for authorisation were completed incorrectly and that both Ahmed and BFM had previously been involved in non-disclosure problems.

Ahmed refered the case to the tribunal, which ruled against the regulator’s decision.

It found: “Mr Ahmed has satisfied us that he is a fit and proper person for the purpose of his application. Accordingly the Tribunal directs that the Decision Notice in relation to him should be withdrawn. For the reasons set out above and accepted by the Authority, it follows that the Decision Notice 5 in relation to BFM should also be withdrawn.”

Compliance consultant Adam Samuel says during the hearing the FSA presented incorrect evidence to the Tribunal, which it later retracted, only to supply further incorrect evidence.

He says: “It is perfectly normal for people to make mistakes. However, where a public authority is proposing to prevent an individual from working, it needs to be careful to ensure that evidence presented before the Tribunal is accurate and presented to support arguments that it actually supports.

“When an error has been shown to exist in that evidence, it becomes even more important not to compound it with a further error that could easily have misled a less attentive tribunal. The FSA needs to have an internal audit enquiry as to why it presented a witness statement that made claims not backed up by the attached material.”


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