Release Date: 31st March 2015

To access the original FCA document, click here.

Summary

Who was fined:

• Robert Stephan Addison, associated with Arch Financial Products LLP (AFP).

Why the FCA fined him:

• The FCA imposed a financial penalty of £200,000 on Robert Addison for breaches of the Statements of Principle for Approved Persons, specifically Principles 1 (Integrity) and 7 (Compliance with Standards).
• The FCA withdrew Addison’s approval to perform controlled functions and prohibited him from performing any function related to regulated activities.
• The breaches occurred due to failures in managing conflicts of interest, integrity issues in specific transactions, inadequate compliance monitoring procedures, and inadequate systems for managing non-public information.

Key Takeaways for Other Firms:

• Conflict Management: Ensure robust policies and procedures are in place to manage conflicts of interest. This includes proper identification, mitigation, disclosure, and record-keeping.
• Integrity in Transactions: Act with integrity in all business dealings, especially in transactions involving potential conflicts of interest.
• Compliance Monitoring: Implement an adequate, formal, and independent compliance monitoring programme to regularly report compliance issues to senior management.
• Systems and Controls: Maintain adequate systems for segregating and controlling access to non-public information.
• Leadership Responsibility: Compliance officers must take reasonable steps to ensure that necessary systems and controls are in place to meet regulatory obligations.
• Audit Trails: Maintain accurate and accessible records of steps taken to manage conflicts to establish a corporate memory and facilitate audit trails.

By adhering to these principles and ensuring robust systems and controls, firms can mitigate risks and avoid regulatory penalties.