UT-2023-000032 - [2024] UKUT 00265 (TCC)

The Decision is set out in a decision notice (the “Decision Notice”) dated 14 March 2023 and in it the Authority summarised its reasoning as follows:

“Since becoming an independent financial adviser in 2013, Mr. Ashraf has worked as an Appointed Representative (“AR”) under two Principal firms …. Both Principal firms terminated Mr. Ashraf’s AR agreements following internal investigations, which gave rise to concerns as to Mr. Ashraf’s competence and fitness and propriety.

The investigations identified breaches in relation to non-compliance with internal procedures. The Authority considers that the alleged findings indicate a pattern of non-compliance with procedures, and Mr. Ashraf has not demonstrated that he will be able to comply with all regulatory requirements should AWML’s application be approved.

Mr. Ashraf and his wife, Mrs Ashraf are the two directors of the firm. However, Mrs Ashraf has not previously worked in a financial services firm. Mr. Ashraf has worked in the financial services sector since 2006 and therefore has relevant professional experience. The business plan submitted with the application states that Mr. Ashraf will be the only adviser at the firm. The Authority considers that given the concerns identified, Mr. Ashraf has not demonstrated that he satisfies the requirements of a fit and proper person. The refusal of Mr. Ashraf’s application will therefore leave the firm without the requisite resources, including a qualified adviser, and therefore unable to meet the Appropriate Resources threshold condition.”

The Applicant does not agree with the Authority’s assessment. At a very high level, its position is that the circumstances around Mr. Ashraf’s first termination are historic and little weight should be attached to them. As far as Mr. Ashraf’s second termination is concerned, the Applicant’s case is that little weight (if any) should be ascribed to that as the investigation by the second principal (and the findings which flowed from it) was flawed and littered with basic errors.

We will set out the evidence we heard and our findings of fact in relation to the two terminations and then move on to outline and discuss the parties’ submissions and the reasons for our decision.