The Court of Appeal today handed down judgment allowing the appeal in Personal Touch Financial Services Ltd v SimplySure Ltd and Usay Business Ltd [2016] EWCA Civ 461. The appointed representative, which sold private medical insurance, had permitted advisors who were not authorised by its principal firm to complete the initial section of a fact-find. It followed that if completion of the initial section of the questionnaire amounted to a regulated activity, this would be in breach of the appointed representative agreement with the principal firm. The initial section of the form included questions about personal details and existing medical insurance. In particular, there was a question about the type of any such insurance.

Considering the commentary in PERG, the Court of Appeal held that completion of the initial section of the form amounted to carrying on a regulated activity under RAO article 25(1) and (2) (“arranging deals in investments”). The scope of art 25 was deliberately wide. Completion of the initial section amounted to “making arrangements for” the potential client to buy the insurance (art 25(1)) and also “making arrangements with a view to” him buying the insurance. The purpose of completing the form was the purchase of insurance and arranging for the representative to visit or interview the client was an “arrangement”. The representative was in a position where he “could” advise the client. Answering the question about the type of existing insurance required a degree of specialist knowledge.

There was no need to consider the art 26 exclusion, as this only applied to art 25(1) and the activity also fell within art 25(2) in any event.