FCA v Avacade – promoting or introducing?

The FCA is, unsurprisingly, pursuing significant proceedings against Avacade, a related company and its directors in relation to unregulated business.

This is an important case as it relates to the responsibility of those unregulated introducers who claim to be “introducers” but the FCA is pursuing as “promoters”.

The importance is that there is a narrow, bland exemption from the requirement to be regulated by the FCA when introducing a customer to a financial product. That is often typified as covering situations such as dental insurance leaflets in a dentist’s office.

Avacade however is alleged to have gone further and promoted to individuals that they transfer their pensions into SIPPs and then invest in the promoted investments (the FCA’s case summarised at p.85)

This is quite important as following SimplySure v Personal Touch Financial Services the threshold to cross into “arranging” (a different regulated activity) is very low and it will be important to see where the line is drawn for “promoting”.

The recent decision of Mr Adam Johnson QC (sitting as a Judge of the Chancery Decision) in FCA v Avacade [2020] EWHC 26 (Ch) concerned the application to adjourn the trial on ill health ground of one of the directors. Having dismissed this we can expect a trial within a window from 13 January 2020.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.