Further to Peter Hamilton’s recent authoritative article in Money Marketing, both he and Anthony Speaight, QC, may well find it easier in their submissions to the Treasury to first use the example of a departed firm when attempting to illustrate their concerns.
We have acted unsuccessfully on behalf of a partnership which resigned from PIA authorisation in 1995. The partnership was dissolved over six years prior to the enactment of FSMA 2000 and creation of the FSA and the FOS (and the “comp-ulsory jurisdiction”) on December 1, 2001.
The FSA would clearly not attempt to argue that the firm or its former principals (whether they advised or not) are subject to FSA regulation.
However, the FOS seeks to argue that they have jurisdiction to make binding awards against the firm, even where the advice was given under Fimbra rules.
There was no requirement to document the reasons for recommendations in writing (or the risks) until January 1, 1995 (or earlier for pension transfers), files could be destroyed after six years and both Fimbra and the PIA followed the law on limitation. Despite this, complaints viewed under subjective views taken now of suitability then may be upheld simply because of the lack of evidence of prior investments or because the FSA has changed the rules on time-barring (on at least three occasions) to extend the time limits to complain and allow the FOS to assert jurisdiction.
Subject to the agreement of our client, we will write separately to Peter Hamilton in an attempt to support a clarification of the law, which would be of assistance to all.
Director Regulatory Legal Solicitors