The Upper Tribunal has ruled that the FSA’s CF1 application form is “poorly designed” and overturned an FSA decision to refuse an application for director approval.
The Upper Tribunal, formerly the Financial Services and Markets Tribunal, published its decision in the case of Mandeep Panesar and the FSA last week.
Panesar applied for approval to perform the controlled function of director at Burlington Associates in early September 2008 and put the effective date of the controlled function as September 1, 2008.
In November 2009, the FSA refused Panesar’s application, saying he lacked the competence and capability to understand and comply with regulatory standards.
The FSA argued that Panesar acted as managing director without the FSA’s approval while it assessed his application and that he had wrongly signed a declaration saying he had read the accompanying notes.
In its decision, the tribunal says: “We would comment that the form seems poorly designed in asking for a date to be filled, when the notes contain the somewhat contradictory and Delphic comment indicating that ordinarily a date should not be filled in.”
The tribunal says the fact that Panesar did not realise he should not start his duties prior to approval was an “unfortunate instance of carelessness rather than an indication of any lack of honesty or integrity, or of the appropriate competence to perform the function of director.”
An FSA spokesman says it has since introduced an online application system, which addresses the tribunal’s concerns.
He says: “With the introduction of the online notifications and applications system, the issues raised by the tribunal have largely been addressed. The FSA will consider carefully the tribunal’s comments and, if necessary, look to enhance the system.”
He adds that the FSA is “unlikely” to review past applications that the regulator rejected in light of the tribunal’s decision.