Financial Conduct Authority scope / jurisdiction

[DavidMorris1967]

Hello everyone, really good forum here.

I operate a UK ltd company business that currently doesn't fall within the scope of FCA regulation, but there are indications the FCA may cover some of our activities.

If we were to move off-shore (not physically ourselves, we'd remain in the UK), so somewhere like Hong Kong or any other possible jurisdiction, would that take us out the scope and reach of the FCA?

Our customers are global. US, Australia, EU, South Africa etc.

Appreciate anyone who can offer some help.

Darren.

 

[tony84]

Call the FCA and ask them.
You do not need to give your business name, just say you are looking at setting up a business and explain what you do.

If you are selling to UK customers, I think you have to be regulated by the FCA.

 

[DavidMorris1967]

Plenty of companies that aren't regulated by the FCA will sell to UK customers. For example companies with equillivent licences in Australia, Bahamas etc (and who aren't passporting).

It's more question as to what would make us beyond the scope of the FCA, regardless of whether our activities fell within or out of their remit.

 

[tony84]

You seem to have done research, so why not call the fca and ask.

 

[WaveJumper]

Would it not be better if your business activities required it to be registered with the FCA give you a more professional standing rather than hiding behind that of an offshore company.

Would not registration attract more business and safe guard your clients?

 

[Frank the Insurance guy]

It's more question as to what would make us beyond the scope of the FCA, regardless of whether our activities fell within or out of their remit.

If you want to go beyond the scope of the FCA, you need to set up your company outside the UK and not have any UK Customers! Note - if you have overseas customers, you may need to be regulated by the FCA equivalent in that country!

Would it not be better if your business activities required it to be registered with the FCA give you a more professional standing rather than hiding behind that of an offshore company.

That won't work if they are looking to bypass FCA regulation as they already know that their request for authorisation would be declined by the FCA, plus in doing so, they may put themselves on the FCA's radar?

If that's not the case, then I can't see why they would not go for FCA authorisation!

 

[IanSuth]

Not an expert (but my brother is) i know he has spent a lot of the last few years helping uk fin services firms set up eu based operations so they fall inside the eu regulatory framework and I know for the purposes of that (which is different from your situation) a brass plaque operation is not good enough, there needs to be "effective control" so an actual manned office with someone to carry the can in it.

You need to take expert advise as I think if you get it wrong it could be a world of pain

 

[DavidMorris1967]

I appreciate you all taking the time to reply.

Would it not be better if your business activities required it to be registered with the FCA give you a more professional standing rather than hiding behind that of an offshore company.

Would not registration attract more business and safe guard your clients?

The advice we have is the current activities we engage in don't require authorisation, but I expect they may in the future, so it's more a case of future-proofing and minimising disruption.

One major issue with being regulated are marketing restrictions.

You need to take expert advise as I think if you get it wrong it could be a world of pain

Agreed.

At this stage I'm just trying to gather some basic knowledge around the matter before taking advice.

If you want to go beyond the scope of the FCA, you need to set up your company outside the UK and not have any UK Customers! Note - if you have overseas customers, you may need to be regulated by the FCA equivalent in that country!

This is one of the sticking points for me. I can't see how they can have any scope if off shore, regardless as to whether or not we have UK customers.

 

[IanSuth]

This is one of the sticking points for me. I can't see how they can have any scope if off shore, regardless as to whether or not we have UK customers.

Because you have to be somewhere (even Sealand) and thus you have to be under somebody's jurisdiction be that the UK FCS, the EU or The Monetary Authority of Singapore (who have a deal with the FCA)