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What has happened?

In August 2021, the FCA imposed a requirement on Cavendish Incorporated Limited, with immediate effect, not to carry on any regulated activities for which it has a Part 4 A permission without the FCA’s prior written permission.

What do you need to do?

The FCA has chosen to impose this requirement on Cavendish because it is failing, or is likely to fail, to satisfy the Suitability Threshold Condition. The FCA has identified serious concerns relating to Cavendish in that it appears to have breached the Principles for Businesses in the following ways:

• It breached Principle 6 (Customers’ interests) by failing to pay due regard to the interests of its customers and treat them fairly, specifically;

1. • Since March 2021, the FCA has received reports from eight consumers claiming to have invested substantial funds in bonds or loan notes issued by Cavendish or through its former appointed representative Cottesmore Associates Limited. Based on these reports, it appears that Cavendish and Cottesmore provided consumers with misleading information about the extent of protection available under the Financial Services Compensation Scheme for these investments and on the permitted scope of their regulated activities. These misleading statements were likely designed to increase consumer trust in Cavendish and Cottesmore and influence investment decisions.
   • It appears Cavendish and Cottesmore have carried out investment-related activities with consumers. Neither Cavendish nor Cottesmore are permitted to provide regulated investment services. Cavendish and Cottesmore’s actions may pose significant risks to consumers due to the potential lack of regulatory protection that would otherwise be afforded to them.

• It breached Principle 11 (Relations with regulators) by failing to deal with the FCA in an open and cooperative way, specifically;

1. • The FCA is unclear about the nature of Cavendish’s current business activities. Based on information from Cavendish’s website, Companies House records and consumer reports, they disclose activities that suggest Cavendish is not engaged in credit broking activity, for which it is authorised.
   • The FCA is also unclear on the identity of Cavendish’s director. Cavendish’s website includes information on Cavendish’s director, but the details disclosed are inconsistent with those supplied in the CV submitted in support of her application for approval.
   • Cavendish has failed to provide the FCA with correct and up-to-date details for its Financial Services Register records. There are inconsistencies relating to Cavendish’s contact details as recorded on Companies House and the Financial Services Register.
   • On 7 May 2021, Cavendish applied to withdraw Cottesmore’s AR status. Cavendish explained that it ended its relationship with Cottesmore after an investigation found that Cottesmore was offering services for which it was not approved. Cavendish has not provided any specific details about this investigation.
   • Since April 2021, Cavendish has not answered telephone calls or responded to written communications from the FCA, which included three section 165 information requests requiring information about Cavendish’s business activities.

How can we help you?

If you’d like to know more about how we can help you with your governance, FCA permissions, AR oversight or financial promotion arrangements, or with any other regulatory compliance issues, our expert team is here to help.

Contact us today on 0207 436 0630 or email info@thistleinitiatives.co.uk.