UT/2023/37 - [2024] UKUT 00229 (TCC)

Mr Fell noted that the supervisory notices took effect immediately (s55Y(4)(b) FSMA), and that when a supervisory notice takes effect, the Authority is required to publish such information about the matter to which the notice relates as it considers appropriate (s391(5) FSMA). However, the Authority did not immediately publish the contents of the supervisory notices, but instead negotiated with Promethean the terms of a notice that would appear on Promethean’s website. To the extent that publication of the terms of the requirements is required under s391 FSMA, publication of references to those requirements cannot be unfair. In this context, Promethean applied to the Tribunal for the requirements to be suspended, but subsequently did not pursue that application.

Mr Fell submitted that it cannot be unfair for the Authority to publish a reference to the requirement in the supervisory notices for the trading names to be removed from the Register, and the fact that this requirement had been referred to the Tribunal. It was necessary that the movement of the IPs’ trading names from the “active names” to the “previous names” sections of the Register be explained.

Fourthly, the allegations raised by the Authority are matters of opinion, and not of fact – and should be tested. Mr Maddison noted that neither Promethean nor the IPs had received any complaints from consumers in respect of the trading names listed on the Register. There was no evidence that there had been any consumer detriment.

Fifthly, Promethean’s entry on the Register included a notice that not all of its activities were subject to authorisation by the FCA, and that consumer protections may not be available for the non-authorised activities. Consumers would therefore be aware that they might not be able to benefit from the consumer protection that is otherwise available to customers of authorised entities.

Sixthly, the October 2022 and February 2023 guidance issued by the Authority in respect of trading names was defective, as no consultation about the guidance had been carried out in accordance with s139A(5) FSMA. Mr Maddison notes that the guidance states that the addition of trading names to the Register has no legal effect, and relies on this in support of Promethean’s position that the inclusion of the NGTN’s does not give rise to any breach of FSMA.

Seventhly, the change in the commercial arrangements between Promethean and the IPs (moving from a referral model to a fixed monthly fee) affected the commercial relationship and regulatory requirements with the IPs.

Finally, the Authority’s statement in paragraph 26 of their 7 November 2022 letter that the use of “org” domain names is limited to charities and not-for-profit organisations is wrong. Mr Fell’s response is that the use of “org” domain names is not central to the Authority’s case, and the use of the “org” domain can carry the connotation that a domain is linked with a philanthropic endeavour.