Judgment summary
Mr Forster, authorised under Part 4A of the Financial Services and Markets Act 2000 (FSMA) for many years as a sole-trader adviser trading as Premier Research and Marketing, referred to the Upper Tribunal a Decision Notice issued by the FCA on 21 November 2024 cancelling his permission under section 55J FSMA (1). The cancellation was based on his prolonged failure to comply with periodic regulatory reporting requirements under SUP 16 of the FCA Handbook (1)-(4).
Mr Forster accepted that he had not submitted any periodic returns since 2019 but argued that the FCA acted unreasonably and disproportionately, failed to consider his extenuating personal circumstances, and breached his rights under the European Convention on Human Rights (2), (32)-(34).
The Tribunal, applying the reasonableness test from North London Van Centre Limited v FCA [2019] UKUT 233 (TCC), concluded that the FCA's decision to cancel was plainly within the range of decisions reasonably open to it, and dismissed the reference (7), (76)-(77).
Background
Mr Forster had worked in financial services for more than fifty years, operating since the late 1990s as a sole-trader adviser under the name Premier Research and Marketing, describing himself as one of the last remaining 'composite brokers' (8). He was the only adviser in the business, without administrative support (8).
Under SUP 16, authorised firms must submit periodic regulatory returns, including the Retail Mediation Activities Return (RMAR) sections (RMA-A to RMA-K), consumer credit returns (CCR002 and CCR005), and half-yearly DISP complaints returns (3), (9)-(13). These returns feed into the FCA's supervisory dashboards and are used to assess financial soundness, client money protection, PII cover, competence and complaints, particularly for smaller firms with limited direct FCA engagement (14), (29).
Mr Forster's last half-yearly RMAR returns were submitted for the period ending 30 September 2019, due 11 November 2019 (16). His last annual returns related to the period ending 31 March 2018, due in May 2018 (17). No RMAR, CCR, or DISP return was submitted for any period thereafter. By 23 May 2025, the FCA had identified 99 outstanding half-yearly items and 24 outstanding annual items, with a further half-yearly deadline passed in November 2025 (18)-(20).
The FCA granted multiple extensions from 22 May 2023 onwards, offered to discontinue enforcement action if only the most recent set of outstanding returns was filed, issued a Warning Notice in September 2024, and agreed a formal stay of enforcement proceedings until 28 February 2025 after Mr Forster's reference to the Tribunal, all without any return being submitted (27)-(28).
Core dispute
The core issue was whether the FCA's decision under section 55J FSMA to cancel Mr Forster's Part 4A permission, on the basis that he failed to satisfy the Suitability Threshold Condition in paragraph 2E of Schedule 6 FSMA through prolonged non-submission of regulatory returns, was reasonably open to it (3)-(4), (7).
Mr Forster contended that his personal and family circumstances, including his own health difficulties, serious health needs of close family members, caring responsibilities for elderly relatives, the aftermath of a stalking incident in 2020, and the absence of administrative support as a sole trader, provided a reasonable explanation for his non-compliance, and that cancellation was a disproportionate response to what he characterised as 'some paperwork' being late (21)-(26), (32)-(33), (53).
He further argued that the FCA's decision and conduct of the proceedings breached his rights under Article 3 (prohibition of inhuman or degrading treatment), Article 6 (right to a fair hearing) and Article 8 (right to respect for private and family life) of the European Convention on Human Rights (34), (62)-(71).
The FCA submitted that the complete absence of returns for over six years left it without essential supervisory information, that it had granted extensive forbearance without any resulting compliance, and that Mr Forster's ECHR arguments were misconceived (35)-(38).
Court findings
The Tribunal accepted the FCA's evidence, given by Mr Kevin Oh and unchallenged, that periodic returns are central to supervision of some 5,000 firms in Mr Forster's cohort and that the absence of returns since 2019 left the FCA without visibility of his financial resources, client money position, PII cover, competence, and complaints for more than six years (5)-(6), (29)-(30), (39).
The Tribunal found that the reporting obligations applied uniformly regardless of firm size, that many RMAR items required only simple entries or nil returns, and rejected Mr Forster's submissions that the returns were too complex for a sole trader or that the FCA should have completed them for him (40)-(43).
While accepting that Mr Forster's personal circumstances were 'extremely challenging', the Tribunal found that he had prioritised client work over regulatory compliance throughout the period and that this could not excuse wholesale non-compliance, since regulatory obligations are 'part of the price for the right to conduct regulated activity' (44)-(48).
On future compliance, the Tribunal found no credible basis, including in a post-hearing RegData screenshot showing many items still marked 'No Data' or 'Waiting for Cross Validation', to conclude that Mr Forster would bring his returns up to date if given further time (49)-(52).
On proportionality, the Tribunal noted that in North London Van Centre delays of 155 and 270 days justified cancellation, whereas here the period of complete non-submission exceeded six years with more than 120 returns outstanding and no credible compliance plan (54). The Tribunal also found that loss of income following cancellation was an inherent and foreseeable consequence of losing authorisation, not a disproportionate outcome (55).
On the ECHR arguments, the Tribunal held that Article 3 was not engaged because the FCA's conduct did not approach the required threshold of severity (63)-(65). It held that Article 6 was satisfied because any procedural defect at the administrative stage was cured by the de novo Tribunal hearing, and the procedural timetable was set and repeatedly relaxed by the Tribunal, not the FCA (66)-(68). It held that, even if Article 8 was engaged, the interference was justified and proportionate given the FCA's legitimate aim of consumer protection and its attempts at less intrusive means (69)-(71).
Outcome
The Tribunal concluded that the FCA's decision to cancel Mr Forster's Part 4A permission was plainly within the range of decisions reasonably available to it (76). Mr Forster's reference was accordingly dismissed (77).
Major issues / areas of contention
- Whether the FCA's decision under section 55J FSMA to cancel Mr Forster's Part 4A permission for failure to satisfy the Suitability Threshold Condition in paragraph 2E of Schedule 6 FSMA was reasonably open to it.
- Whether Mr Forster's personal and family circumstances provided a reasonable explanation for over six years of complete non-submission of periodic regulatory returns under SUP 16.
- Whether the FCA's decision to cancel was a proportionate response given the length and completeness of non-compliance and the absence of consumer complaints.
- Whether there was any credible evidence of future compliance justifying a further opportunity rather than cancellation.
- Whether the FCA's or Tribunal's conduct of the proceedings breached Mr Forster's rights under Article 3, Article 6 or Article 8 of the European Convention on Human Rights.
- Whether the size and simplicity of a sole trader's business exempted it from, or reduced the burden of, statutory reporting obligations.