Release Date: 1st February 2016
To access the original FCA document, click here.
Summary
The FCA has fined Mr Colin J McIntosh £51,600 and imposed a prohibition order, banning him from performing any controlled function in relation to any FCA-regulated activity. Mr McIntosh was fined due to multiple breaches of regulatory principles while acting as Director at Coverall Worldwide Ltd and Chief Executive at Millburn Insurance Company Ltd.
Key reasons for the fine and prohibition:
- Breach of Regulatory Principles at Coverall:
- Statement of Principle 1: Recklessly failed to mitigate risks to potential policyholders.
- Statement of Principle 7: Failed to ensure that Coverall and its appointed representative, Aderia, had adequate controls over their regulated activities.
- Mismanagement of Client Money: Did not ensure that client money was handled in accordance with FCA rules, leading to a potential loss of £13.2 million in client funds.
- Breach of Regulatory Principles at Millburn:
- Statement of Principle 4: Failed to deal with the FCA in an open and cooperative way, provided misleading information, and did not disclose important details about a reinsurance treaty.
Key takeaways for other firms to avoid similar consequences:
- Implement Robust Controls: Ensure adequate controls over all regulated activities, especially when dealing with appointed representatives or third parties.
- Client Money Compliance: Always handle client money according to FCA’s Client Assets Sourcebook (CASS) requirements to protect policyholders’ funds.
- Transparency and Cooperation: Deal with the FCA in an open and cooperative manner, providing accurate and complete information.
- Mitigate Risks: Act promptly to mitigate identified risks to consumers and ensure that any authority given to individuals is monitored and controlled.
- Senior Management Responsibility: Senior managers must take full responsibility for the firm’s compliance with regulatory standards and not delegate these responsibilities without proper oversight.
In conclusion, the FCA’s action against Mr McIntosh underscores the importance of regulatory compliance, the need for robust internal controls, and the critical role of senior management in maintaining the integrity of the financial system. Firms must ensure that they have effective systems in place to prevent similar breaches and protect consumers.
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