What is a Section 165 request?
Section 165 of FSMA (the requirement to produce information and documents) provides the FCA with the general power to require the production of documents and the provision of information by firms. This can cover any information of interest to the FCA in relation to firms’ regulated activities, and it may involve very tight deadlines to answer questions and for the production of highly detailed operational, financial and marketing information.
Any firm can receive a request of this type, although currently the FCA’s focus is on debt instruments signed off under Section 21 of FSMA, such as:
- listed bonds
- mini-bonds, and
- loan notes.
What does a firm need to do?
Firms need to answer all questions and provide the FCA with all information requested within the deadline given, possibly including highly detailed operational, financial and marketing information relating to their business models, sources of revenue and approvals for financial promotions.
The information and documents the FCA is requesting are required in order that the regulator can be satisfied that the firm is meeting, and will continue to meet, the Threshold Conditions.
The questions will apply not only to the firm itself, but also to any subsidiaries, affiliates and appointed representatives.
The questions are generally seeking a concise written answer explaining the firm’s practices. The spreadsheet supplied with them seeks more specific data in relation to each of the investment deals the firm has been involved in.
What are the consequences?
If the firm fails to provide a response, or provides an inadequate response, it can lead to a wide range of FCA enforcement actions, including:
- The requirement for a skilled persons report (a Section 166 report)
- Cancellation of permissions
- Withdrawal of authorisation
- A winding-up order
- Fines/assets seized
- Entering the firm’s premises, with a warrant, and
- Civil proceedings.
What can Thistle do to help?
There are a number of practical steps that firms should take when faced with any type of information request from the FCA, and Thistle can help you with any of these:
- Initial advice and guidance regarding the information request, to ensure the firm understands what information needs to be presented to the FCA
- Mapping the information request against the firm’s actual activities to ensure an accurate and concise response, and
- Assisting the firm to draft/prepare the response, including reviewing all supporting information needed as quickly as possible.
We have extensive experience assisting firms that are subject to FCA information requests such as Section 165 requests and skilled persons reports (Section 166).
Fill in our contact form, email firstname.lastname@example.org or call us on to find out how we can help.