In Financial Conduct Authority (the “FCA”) v 24hr Trading Academy Ltd (the “24HTA”) and another [2021] EWHC648, the Court of Appeal recently refused an application for permission to appeal, meaning that 24HTA cannot take this matter further to the Supreme Court, which subsequently brings this case to a close.
BACKGROUND
The High Court found that 24HTA was an unauthorised company which had carried out regulated activities specified in the Financial Services Markets Act (“FSMA”) (Regulated Activities) Order 2001 (the “RAO“) without necessary FCA permission. The activities which 24HTA were deemed to have carried out were:
- advising on investments;
- arranging deals in investments; and
- communicating invitations or inducements to engage in investment activity.
These activities were carried out in breach of the general prohibition set out in section 19 of FSMA, and in breach of section 21 of FSMA.
CONCLUSION
As a result, 24HTA is required to comply with the remedies enforced by the High Court as follows:
- 24HTA cannot continue advising and arranging deals in investments; and
- 24HTA has to compensate its consumers who suffered financial loss and where that loss was incurred as a result of 24HTA’s inducements to engage in investment activities.
This case reiterates to firms that providing information or recommendations, even without an intention to advise, could still amount to regulated activities under article 53 of the RAO. It should be noted that communicating an invitation or inducement to engage in such activities may breach section 21 of the FSMA regardless of the communication channels used. Therefore, firms are advised to obtain necessary authorisations or approvals to prevent potential offences, arising from their provision of information.
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To read our previous article on the High Court’s judgment, please click here.
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