Styperson POPE

Strategy & Compliance for Investment Firms


Interim Compliance Officer & Part Time Director

Simon Webber is a portfolio Head of Compliance, Board Director and Consultant to FSA-regulated investment firms.  He is approved by the Financial Services Authority as a Compliance Officer, Money Laundering Reporting Officer and Director.

Simon specialises in assisting corporate finance houses, business angel networks, and companies structuring, launching and managing alternative asset funds, unregulated collective investment schemes and EIS funds.

Often he focusses on turning around the compliance function or integrating it more effectively with the rest of the business, making it more strategic and less obstructive.  This often requires an involvement with strategy and culture as well as business processes, FSA relationship management, and staff development.

As well as running StypersonPOPE, Simon is currently a Director of businesses in both London and Manchester including a market-leading alternative investment fund manager, a start up funds market, a corporate finance and early-stage investment house, and a Non-Executive Director placement service.

He holds two undergraduate degrees with honours and a masters degree.  He is a founder member of a regional committee for the Institute of Directors and is proud to be a Director of a charity giving over £6m per year to community projects.

If you would like to speak to Simon, please contact him on +44 (0) 7710 260 717 or sw@strategic-compliance.co.uk.

(Or take a look at linkedin.com/in/simonwebber and
twitter.com/stcwebber if you prefer.)


Promotion of Unregulated Collective Investment Schemes

As with most types of financial services, people who are not authorised and regulated by the FSA are very restricted in how they can promote an unregulated collective investment scheme.  Unusually even regulated firms are subject to tight restrictions.  The Financial Services and Markets Act 2000 (let’s just call it FSMA), makes it an offence for anyone to promote a scheme to the public:

“An authorised person must not communicate an invitation or inducement to participate in a collective investment scheme.”

Fortunately, for regulated firms, there are a few exemptions, one set is created by Treasury Order and the other by the FSA.

Treasury Exemptions
If an investor falls into one of the categories below, a fund can be promoted to them but the promoter must ensure that the investor falls into the category before making a promotion:

  • Investment Professionals (authorised firms and investment companies);
  • Sophisticated Investors with a certificate signed by an authorised firm covering unregulated schemes; and

  • High Net Worth Companies and Unincorporated Associations.

For some schemes that invest in unlisted securities, authorised firms can also invite High Net Worth Individuals and Sophisticated Investors to self-certify.

FSA Rules
These allow a scheme to be promoted to investors who have undergone an assessment by an authorised firm, including:

  • individuals for whom the scheme has been assessed as suitable (usually by a financial advisor); and

  • individuals for whom an assessment of experience, expertise and knowledge has been undertaken (sometimes by a financial advisor or the scheme’s Operator).

In these cases, a fund can be promoted to a potential investor on the basis that they will be prevented from investing unless they successfully complete the assessment (which may occur after the promotion has been made).

Whichever exemption the investors fall into, the documents for the scheme must meet detailed requirements laid down by FSMA, the Treasury and the FSA. These include presenting a balance of risk and reward, carrying appropriate warnings, giving sufficient information, and always being clear, fair and not misleading.  Summary documents can be used but these also have to meet the rules and must be consistent with all of the other information given to investors.

In most cases, an FSA authorised firm can approve the scheme documents and summaries for distribution by an unauthorised person but only to the relevant categories of exempt investor.  To rely on the FSA’s exemptions, careful procedures will need to be followed by the authorised firms (see our Services For Operators).

If you would like to discuss your plans to market an unregulated collective investment scheme, please contact Simon Webber, StypersonPOPE’s Managing Director, on 07710 260 717 or sw@strategic-compliance.co.uk.

 

 


Anti-Money Laundering

All FSA-authorised firms are required to ensure that their businesses are not used to facilitate financial crime.  Since December 2007, many unregulated companies have joined them, becoming responsible to other regulators including HMRC and the Office of Fair Trading (OFT).

The Joint Money Laundering Steering Group (JMLSG), part of the British Bankers’ Association (BBA), has devised rules for all of these businesses to follow in their anti-money laundering efforts.  Because of our familiarity with these rules, we can prepare appropriate procedures based on your business’ exposure to the risk of financial crime.  We can tailor these to fit your existing business processes and ensure that they are easily understood, implemented and overseen.

We are able to offer the services of an FSA and HMRC-approved Money Laundering Reporting Officer who can oversee the processes we implement and report to your Board, SOCA or you relevant authority as required. 

If you would like to discuss any aspects of money laundering reporting, please call or e-mail Simon Webber, our Managing Director.


Interim Compliance Officer

Losing a colleague at short notice is always difficult but if your firm is FSA authorised, and the person you lose is a Compliance Officer, it’s essential to find an Interim Compliance Officer as quickly as possible.  Quite apart from the day-to-day compliance issues, and the risk of running up considerable costs for external advice, the FSA demands that all firms have a Compliance Officer:

A firm which carries on designated investment business… must allocate to a director or senior manager the function of having responsibility for oversight of the firm’s compliance.

We recently carried out an ICAAP risk assessment for a client firm which revealed that losing their Compliance Officer would have a greater financial impact on the business than losing their Chief Executive!  Firms must also be careful to ensure that whoever looks after the role, even for a short period, is sufficiently knowledgeable and experienced to carry it out.

An approved person performing a significant influence function must exercise due skill, care and diligence in managing the business of the firm for which he is responsible in his controlled function.

We can provide an Interim Compliance Officer with the necessary skills to fulfil the FSA’s requirements but, much more importantly, with the experience of working at Board level and capable of quickly understanding your business while playing a full role in the strategic direction of compliance matters.  We can also take responsibility for training up your permanent replacement and will gladly stay on as a mentor or just to give occasional advice on more specialised subjects.

Simon Webber, who will act as Interim Compliance Officer, serves permanently on a number of Boards either as Head of Compliance, Director or Non-Executive Director.  If you would like to speak to Simon about any aspect of compliance, please call or e-mail him.


Compliance Awareness & Understanding

When running an authorised business, or even when operating within exemptions to authorisation, it is vital to have an understanding of the compliance environment.  How else can you effectively plan the strategy of the firm? 

It is necessary for the management of firms to have a working knowledge of compliance without being paralysed by the details.  We base our awareness advice on three levels of knowledge:

  • What you need to know (day-to-day)
  • What you need to look out for (exceptional situations)
  • Who to turn to for more detailed advice

Some staff can receive formal compliance training as a group.  This may create high awareness but relatively low understanding.  Board members, and anyone else involved in the strategic development of the firm, will need to have a more thorough understanding, but only of those areas of regulation which directly affect their firm.  We deliver awareness advice to Directors on a one-to-one basis giving ample opportunity for the free discussion of issues which may affect the firm.  We then remain available to Board members and divisonal heads to give ad hoc advice as it’s required.

If you would like to discuss any aspects of strategic compliance advice, please do call or e-mail Simon Webber, our Managing Director.


Ad Hoc Advice

As well as ongoing and strategic advice, most firms will require occasional, more intensive advice either to acheive a specific goal or to overcome a particular issue. 

Examples of our recent acheivements include:

  • Designing strategic alterations to a client’s permissions and corporate structure to reduce FSA-required capital reserves by over 90%;
  • Overseeing an application to the FSA from a new corporate finance firm;
  • Creating and writing processes for two corporate finance firms;
  • Updating documents and processes after FSA rule changes (CRD and MiFID);
  • Creating and writing processes for a new division operating in a new market;
  • Designing a plan for an innovative private equity investment scheme to market directly to individuals rather than IFAs;
  • Creating compliant documents for two property investment funds; and
  • Designing business models to avoid unecessary (and costly) regulation for unauthorised firms.

If you would like to discuss any projects or issues that require strategic compliance advice, please do call or e-mail Simon Webber, our Managing Director.


Compliance Advice for Boards

It is vital to the devlelopment of any regulated business that the Board is well advised on compliance and that the advice is strategic, not reactive.  It is unlikely that smaller Corporate Finance, Private Equity and Collective Investment firms will need to have a full time team member to advise on or oversee compliance and that is why they should look to an advisor who can be on hand when (and only when) required.

Examples of recent strategic advice to Boards includes:

If you would like to discuss any aspects of strategic compliance advice, please do call or e-mail us.