Cans of worms... 

Recently, one of our Members helpfully alerted us to the fact that ValidPath's 2017 pre-MiFID II upgrade to our permissions, in respect of Structured Deposits had not carried through (on the FCA Register) to every area of activity listed in that place.  This was as a result of an investigation conducted by threesixty in respect of its own members' listings on the FCA Register. 

This was intriguing.  The upgrade path supplied in 2017 by the FCA for this purpose was relatively straightforward and did not differentiate between 'Advising on Investments', 'Arranging (bringing about) deals in investments' or 'Making arrangements with a view to transactions in investments'.  When one looks at the FCA Register entry for ValidPath, our permission to handle Structured Deposits is clearly evident for the first two activities but not the third.  According to threesixty's research, this particular anomaly is, in fact, widespread - and therefore may be indicative of a systemic issue relating to that upgrade of permissions.

OK, so this seems to be an unanticipated anomaly, so what to do about it?  Firstly, there is no central area on the FCA's Connect system to allow one to view all of that information together in one place - the only such location is the FCA Register, and what we were about to find is that there are perplexing differences between what appears there and the options available when we attempted to adjust our permissions.  In practice, therefore, the only real option is to complete a new Variation of Permission form on Connect, and at that point one realises that a completely new structure is in place, presumably driven, to at least some degree, by the new conditions imposed by MiFID II.  It is a massive piece of programming, and the moment one seeks to progress with it, it will not permit one to move to the next screen without first of all inputting new income data in relation to consumer credit activities, a matter which has absolutely nothing to do with the particular need that we had identified.

We spoke to an FCA representative about this, who was extremely helpful, but, as is frequently the case these days, was unable to furnish us with a solution to the problem, other than to instruct us to enter the last reported revenue figure, and confirm in writing why it had not changed.  Furthermore (more worryingly), the FCA appeared to have no record of ValidPath having upgraded its permissions in 2017, despite the fact that Structured Deposits now appear amid our permissions, whereas before they did not.  We also discovered a whole host of investment types, where permissions are clearly in place, according to the FCA Register, where the relevant section of the VOP form ('Arranging (bringing about) deals in investments') appears to assume that we are not authorised!

As you can see, this is one of those sagas which does very accurately fit the title of this particular blogpost - but there's more.   As we manfully waded through the VOP form, we kept a weather-eye open for the section which covers that third category of activity, 'Making arrangements with a view to transactions in investments'.  It's not there.  The Connect system does not appear to facilitate that category at all, which may explain why the FCA Register doesn't display the correct information.

I feel another call to the Firm Contact Centre coming on, but I'm not feeling hopeful...

Kevin Moss, 27/06/2018