In Koksal (t/a Arcis Management Consultancy) v Financial Conduct Authority [2016] UKUT 478 (TCC), the Upper Tribunal upheld the Financial Conduct Authority’s refusal to vary the Applicant’s permission to include the activities of credit broking, debt adjusting, debt-counselling and debt administration.

On 22 December 2015, the FCA issued a decision notice setting out its findings, conclusions and decision. The FCA found that the variation application was incomplete and, despite repeated requests for further information, the Applicant had failed to provide adequate information. The FCA concluded that it was not satisfied that the Applicant could be effectively supervised and was not satisfied that the Applicant was a fit and proper person. Accordingly, the FCA refused to vary the Applicant’s Part 4A permission on the grounds that the Applicant did not meet the threshold conditions.

The Applicant disputed the FCA’s findings and referred his case to the Tribunal. The Applicant argued that the FCA had not been clear and transparent in its communications and asked the same irrelevant questions on a number of occasions. The Applicant contended that he had fully completed the application and provided satisfactory responses to the FCA’s requests.

The Upper Tribunal held:

  • the information requested by the FCA was not irrelevant but was necessary for the FCA to make an informed decision as to whether or not the Applicant met the threshold conditions;
  • the Applicant was unable to demonstrate that there were any internal or external compliance supervision systems in place to ensure compliance with the regulatory rules;
  • the Applicant failed to understand the “step change” brought about by the transfer of responsibility for regulation of consumer credit from the Office of Fair Trading to the FCA;
  • the Applicant was unclear about which of his activities fell to be regulated and failed to provide certain requested information simply because he did not understand the relevance of the FCA’s questions; and
  • the FCA’s refusal to vary the permission was within the range of reasonable decisions open to it and nothing has occurred since the issuing of the decision notice which casts any doubt on the reasonableness of that decision and there are no grounds for asking the FCA to reconsider its decision.


Following its conclusion and in light of the fact that a significant number of the issues in the case arose as a result of the Applicant’s failure to understand the regulatory process and requirements, the Tribunal commented in a postscript as follows:

We also hope that the Authority can learn some lessons from what for them has clearly been a difficult experience and which has resulted in it unnecessarily having to devote considerable resource in dealing with what could have been a routine application had Dr Köksal been more cooperative. Nevertheless, as is clear from some of the observations we have made in this decision, the Authority could perhaps be more helpful when it is clear that a firm is struggling with the complexity and opaqueness of some of the regulatory provisions and give a clear steer as to what matters fall within the scope of the Authority’s regulation and which do not. We note, for instance, that the perimeter guidance from the Authority is somewhat limited when it comes to consumer credit related activities. It is not always an answer simply to tell the firm that it can obtain legal advice. In our experience there are very few legal firms with the necessary specialists who have detailed knowledge of these provisions from whom advice can be obtained by the average small firm at reasonable cost. We do, however, understand the resource constraints within which the Authority had to operate in processing a large number of applications resulting from the transfer of responsibility for regulation of consumer credit from the OFT. We also acknowledge that with the numbers involved, it necessarily had to be largely paper based exercise, although a face-to-face meeting or telephone conference might have resolved the issues that arose in this case. In the absence of face-to-face contact, the quality of information the Authority makes available to firms takes on a greater importance.

The full decision can be read here.