FCA has published its final notice explaining its reasons for refusing a firm’s application to vary its permission. Gedik International Limited was authorised in February 2020 as an agency brokerage with a set of standard permissions relating on a range of securities based investments, including futures and options. It had originally included Rolling Spot FX in its application but had voluntarily withdrawn this before submitting a new application without that activity and including a business plan and financial forecasts.
A year after becoming authorised it applied for a VOP to add Rolling Spot FX and to arrange safeguarding and administration of assets in that connection. The firm said there would be no change to its overall business strategy and no change to its operational, legal and market risks as a result. It also said there would be no change to its financial forecasts or business plan – but it did submit new versions of these at FCA’s request, which showed the anticipated revenue from the new activities was in fact nearly 30% of its total revenue – yet it continued to insist no changes would arise.
FCA considered that it was obvious that the change would mean a change in financial forecasts and the firm’s business model and so the firm’s contention that there would be no change was unsupportable and incorrect. As a result, FCA could not be sure the firm would continue to meet the Threshold Conditions if the VOP were granted, and considered the firm’s responses to questions meant it could not be relied upon to provide FCA with information about relevant matters in an accurate or timely way. It also considered the interaction over the application failed to satisfy FCA that the firm would have appropriate non-financial resources for the proposed new activities.
As a result, FCA refused the application.