The GRC Navigator

Executive Summary

On 26 August 2026 the FCA published three notices on Dolfin Financial (UK) Limited. It fined former chief executive Denisz Nagy £324,800 and former finance director Sanjay Maraj £122,000, banned both from any regulated function, and decided to ban co-founder Roman Joukovski, who has referred his decision notice to the Upper Tribunal. Between 2016 and 2019 Dolfin offered foreign nationals a Tier 1 investor visa for a £400,000 fee instead of the £2 million of their own money the Immigration Rules required them to invest. At least 99 obtained visas this way, and Dolfin-connected businesses and introducers took at least £35.5 million in fees. Two features reach beyond the case: a deterrence multiplier, four times for Mr Nagy, that reached benefits received through other group companies, and the FCA’s reading, in the contested Joukovski notice, that non-voting shares count towards control under FSMA section 422.

No new FCA rules were made in the period. The main change for asset managers was procedural: on 27 and 28 August the FCA moved the deadlines for CP26/26 (FRAME) and CP26/28 (the UK AIFM regime) to 22 October, leaving the remuneration consultation that depends on them to close five weeks earlier. Separately, former SVS Securities chief executive Demetrios Hadjigeorgiou settled for £56,400 after the FCA recast his part in a 10% exit mark-down as a failure of care rather than of integrity. The FCA also published its 2026 wealth management survey, a warning on unregulated mini-bonds and Primary Market Bulletin 65. HM Treasury announced a payments innovation objective for the Bank of England, and the High Court stayed the FCA’s claim against the operator of crypto exchange HTX to 8 September.

Top Story

FCA fines and bans Dolfin’s former chief executive and finance director over a £35.5m visa scheme; a contested notice counts non-voting shares as control

HIGH RISK · Sectors: Wealth Management, Asset Management, Financial Crime, Private Equity

On 26 August 2026 the FCA published a final notice dated 25 August to Denisz Andras Nagy, former chief executive of Dolfin Financial (UK) Limited, another to Sanjay Maraj, its former finance director, and a decision notice dated 30 June to the firm’s co-founder, Roman Joukovski. Mr Nagy was fined £324,800 and Mr Maraj £122,000 under FSMA section 66, and both are prohibited under section 56 from performing any function in relation to regulated activities. Both settled at stage 1. Mr Joukovski has referred his notice to the Upper Tribunal, so the findings against him are provisional and the prohibition the FCA has decided on has no effect until the Tribunal determines the reference.

Dolfin provided wealth management, custody and brokerage services from London. Its “visa loan business” served applicants for Tier 1 investor visas, who had to invest at least £2 million of their own money in UK government bonds or UK trading companies. In the most common version, which the notices call “Gold”, the client paid £400,000 into a Dolfin account as a fee. A Dolfin-connected company in the British Virgin Islands supplied £1.6 million, which moved through Dolfin client accounts and returned to its source as part of the £2 million price of bonds issued by companies in which Dolfin or its directors had an interest. A call option let Dolfin reclaim the bonds after the five-year holding period, and Dolfin wrote to the Home Office confirming that the rules had been met. At least 99 people obtained visas this way between July 2016 and March 2019, 77 of them through Gold. By the FCA’s estimate, gross fees were at least £35.5 million, of which £10.3 million went to immigration agents as commission.

For the periods in which each man was an approved person, the FCA found breaches of Statement of Principle 1 and Individual Conduct Rule 1 (integrity), Statement of Principle 4, Individual Conduct Rule 3 and SC4 (openness with the regulator), and, for reckless or negligent conduct, Statements of Principle 6 and 7, Individual Conduct Rule 2 and SC2. The integrity findings cover the design and running of a scheme meant to get round the Immigration Rules, letters to the Home Office that the FCA found misleading, and what the FCA itself was told. In November and December 2019, when supervisors were asking about Dolfin’s investor-visa clients, Mr Nagy did not mention the scheme. In February and April 2020 Dolfin gave the FCA two immigration law opinions, shared on a limited waiver of privilege. The first rested on questionnaire answers that Mr Nagy and Mr Maraj played leading roles in drafting; the second on information prepared by or under the oversight of Mr Nagy. Neither disclosed the recirculated funding. Dolfin told the FCA about the scheme only on 27 January 2021, after new management found it. Conduct after each man ceased to be approved, including Mr Nagy’s instruction in June 2021 to another authorised firm to send further letters to the Home Office, goes to fitness rather than to the penalty.

Neither penalty includes disgorgement. Step 1 is nil because no benefit either man derived directly from the breaches was identified, although the FCA puts the scheme’s net profit after agents’ commission at £25.2 million. Mr Nagy’s relevant income for November 2015 to April 2020 was £290,043; at seriousness level 5 (40%) the Step 2 figure was £116,017.20. A multiplier of four was then applied at Step 4 under DEPP 6.5B.4G(1)(a) because he “received substantial financial benefits from other Dolfin Group companies” beyond that income, which took the figure to £464,068.80 before the 30% discount. Mr Maraj’s relevant income was £387,522.76; level 4 (30%) gave £116,256.83, a multiplier of 1.5 gave £174,385.25, and the discount left £122,000. DEPP 6.5B.2G measures relevant income from the employment in connection with which the breach occurred, so benefits received through other group entities sit outside Step 2, and the deterrence step is how the FCA reached them. CP26/19, which we covered in Issue 22, proposes to state expressly that the FCA may increase any individual’s penalty where it would not otherwise deter “in light of the size of the individual’s income or net assets”, and describes that as its current approach. Both penalties are due by 8 September.

Mr Joukovski was not a registered director, an approved person or a notified controller. The FCA’s case is that he and the chief executive were the two most senior decision-makers, that he acted as a shadow director, and that he was a controller without the notice FSMA section 178 requires; failure to notify is an offence under section 191F (SUP 11.3.2G). After a 2016 restructuring his Liechtenstein foundation held over 60% of the economic shares in Dolfin’s Bermudan parent, about 70% by November 2019, through non-voting Class B shares. He argued that an economic interest without votes is not control. The Regulatory Decisions Committee rejected that: section 422(2) distinguishes “shares” in limb (a) from “voting power” in limb (b), so a holding of 10% or more of the shares counts whether or not they vote, and his majority economic interest “is, in itself, sufficient to satisfy section 422(2)(a)”. The statutory definition points the same way: section 422(4)(a) defines “shares”, for a company with share capital, as allotted shares. The FCA’s controller guidance, FG24/5, does not address non-voting classes expressly. Until the Tribunal rules, this is the FCA’s stated position in a contested notice, not a holding.

The notices make no findings under the Money Laundering Regulations or the CASS rules, although Mr Nagy was also Dolfin’s MLRO until December 2019 and Mr Maraj held the CASS oversight function while the £1.6 million payments were moving between client accounts. Dolfin itself is not the subject of action; it has been in special administration since 30 June 2021.

For other firms the read-across starts with the controller record, which should be checked against all three limbs of section 422, including non-voting, founder, carry and family-office classes of 10% or more in the firm or any parent, and matched to what the FCA has been told. New business lines need a recorded decision on notification. Mr Nagy called the scheme a “grey area product”, yet the FCA was never given the notice of a new type of product or service that SUP 15.3.8G(1)(c) treats as part of Principle 11. A board should also be able to reconcile revenue by business line to the audited accounts. Gold was forecast to produce £17.6 million in 2018, 76% of forecast group revenue, yet the scheme’s fees were never recognised as fee revenue in Dolfin’s audited financial statements, and neither the group advisory board nor the incoming heads of legal and compliance were told about it.

I’d single out the 2020 opinions for any board that expects to share legal advice with the FCA. The notices do not criticise the lawyers, who answered the questions they were given. The facts behind those questions came from the two people whose conduct was under review. If a firm intends to rely on advice in a supervisory dialogue, someone independent of the business line should settle the instructions and sign off the factual background given to counsel, and the board should see both. Otherwise the opinion records management’s account, and the firm hands it to the regulator as if it were more.

If the people under review write the instructions, a legal opinion records management’s account, and the regulator receives something less than it appears.

Asad Bukhory

Regulatory Updates

FCA moves FRAME and UK AIFM consultation deadlines to 22 October, while remuneration still closes on 16 September

LOW RISK · Sectors: Asset Management, Private Equity, Hedge Funds

In updates to its consultation pages on 27 and 28 August 2026, the FCA extended the response deadlines for two of the three asset management consultations it published on 14 July. Feedback on CP26/26, the Fund Reporting for Asset Management Entities (FRAME) framework, is now due by 22 October 2026 instead of 22 September. For CP26/28, the UK AIFM regime, the deadline for the consultation chapters and for the discussion chapter on prudential reform is also 22 October; the main consultation had been due to close on 14 October. The other CP26/28 discussion chapters still close on 18 September. CP26/27, on remuneration, was not extended and closes on 16 September. We covered all three papers in Issue 25.

The extension is administrative, but it changes the order in which firms answer. CP26/27 defines its scope for AIFMs by reference to CP26/28: the new remuneration code would apply first to full-scope UK AIFMs and then, once the AIFM reforms take effect, only to medium and large AIFMs under the tiers CP26/28 proposes, with small AIFMs up to £750 million of net asset value and large ones above £5 billion. The FCA’s cost benefit analysis estimates that 463 firms now classed as Regular AIFMs would become small AIFMs and leave remuneration scope. So a firm near the £750 million line now responds on remuneration five weeks before it responds on the threshold that decides whether the code applies to it at all.

FRAME interacts with the tiers in a similar way. Its essential reporting applies to funds under £500 million of net asset value, a fund-level test, while the AIFM tiers are firm-level tests on aggregate net asset value, so the common 22 October date allows a manager to answer both from one model of its own fund inventory. The FCA still intends to publish further FRAME prototype forms before the end of 2026, and says a second AIFM consultation with draft rules on the remaining areas, including those in the discussion chapters, will follow, with implementation envisaged in 2028. Its prudential roundtable is on 14 September; expressions of interest are due by 31 August.

My suggestion is to answer CP26/27 on the stated assumption that the CP26/28 boundaries may move. A remuneration answer that works only at £750 million tells the FCA less than one that shows what changes for your firm either side of it.

FCA wealth survey: ten firms serve 89% of discretionary clients, and about 7% of surveyed firms do no sanctions screening

MEDIUM RISK · Sectors: Wealth Management, Financial Crime, Retail Distribution

The FCA’s wealth management survey report 2026, published on 18 August 2026, draws on its third survey of the sector since 2022. It covers discretionary portfolio management and uses responses from around 400 firms. It is a data publication and makes no new rules or guidance, though its “firms should” passages indicate the FCA’s expectations. The data is older than the date suggests: firms reported figures to 31 December 2024 and had until May 2025 to submit, so this describes the sector as it was some twenty months ago. There will be no survey this year; a shorter one is planned for 2027.

Firms in the FCA’s wealth management portfolio serve more than 5.5 million retail clients and manage almost £1 trillion. Portfolio management clients have grown by 20% since 2022 to 1.3 million, while the number of firms, about 500, and of investment managers, about 5,400, is broadly unchanged. Among firms that took part in all three surveys, the ten largest by client numbers now serve 89% of discretionary clients, which the FCA describes as up 19% since 2022. Over the next two years 41% plan to acquire another firm or grow revenue or clients by more than 25%, and 18% are considering winding down or selling all or part of their client base. The FCA links badly managed growth to poor service, weak business continuity and “in some cases disorderly failure”.

The financial crime figures are the ones a firm can most easily compare with its own. Every responding firm now refreshes KYC, against 8% that did not in 2023/24. But 26% do not collect expected transaction frequency, 13% do not record expected investment amounts, around 10% do not verify source of wealth, around 6% do not check whether clients are politically exposed persons and around 7% do not carry out sanctions screening. These are self-reported percentages of the sample. Several of the gaps are gaps in legal obligations: the Money Laundering Regulations 2017 require customer due diligence and PEP checks, and the report itself notes that breaching a financial sanction without an OFSI licence is a criminal offence. On value, the FCA says some firms have not considered how fixed fees affect clients with smaller portfolios, which is the comparison the Consumer Duty’s price and value outcome in PRIN 2A.4 asks firms to make.

The FCA also published consumer research on 27 August on investors aged 18 to 40. In a survey of 666 people on 24 July, 56% said they trusted AI tools and 44% wrongly believed AI-generated financial information is regulated. The FCA states that general-purpose chatbots are not regulated but that tools “specifically set up to provide financial advice would be likely to fall within the FCA’s remit”. The wealth survey found 13% of firms using AI and 45% using or considering it. Any of them building a client-facing tool has to decide before launch which side of that line it sits on.

A discretionary manager did fail within the fortnight. EGR Wealth Limited entered administration on 24 August, with Robert Goodhew and Geoff Bouchier of Kroll appointed, the FCA said in a statement on 26 August; the firm had agreed a voluntary requirement restricting its activities on 24 July. The statement does not say why it failed. It does say that EGR held no client money or custody assets, which are held by another regulated firm under the custody rules, and that customers with unresolved complaints, unaccepted compensation offers or cases at the Financial Ombudsman Service are unlikely to be paid in full; the FSCS will work with the administrators. Outsourced custody kept the assets separate from the failed manager, but a redress claim against the manager is a claim on an insolvent firm.

FCA mini-bond warning: an “FCA-authorised security trustee” does not mean investors are protected

MEDIUM RISK · Sectors: Retail Distribution, Wealth Management, Financial Crime

On 20 August 2026 the FCA issued a press release and a consumer statement on loan notes and mini-bonds issued by unregulated companies. It points to Woodville Consultants Ltd, a litigation funder that raised money from retail investors through unregulated loan notes and went into administration on 16 July 2026. Its legal substance is not new: the FCA’s ban on marketing speculative illiquid securities to retail investors has been permanent since 1 January 2021. What the statement adds is a list of what the FCA is seeing, including a proposal that referred to an “FCA-authorised security trustee”.

The rules are in COBS 4.12B. A speculative illiquid security is, in short, a debenture or preference share with a denomination or minimum investment below £100,000 whose issuer uses the proceeds to lend, to buy investments or to buy or build property (COBS 4.12B.50R). It is a non-mass market investment, so an authorised firm must not communicate or approve a promotion for it that is likely to reach a retail client (COBS 4.12B.6R) unless an exemption in COBS 4.12B.7R applies, for example to certified high net worth or certified or self-certified sophisticated investors, with a preliminary suitability assessment where the exemption requires one. Unregulated sellers, the statement says, try to rely on legal exemptions instead, and ask investors to tick a box certifying that they are sophisticated, experienced or high net worth.

Several of the practices in the FCA’s list involve authorised firms. On the security trustee, the FCA says acting as one “is not a regulated activity in its own right”, that the firm may have a limited role in the deal, and that scammers may use the wording to make an investment look trustworthy. An authorised firm that accepts such an appointment has its FCA status used in marketing it does not control, unless its engagement terms give it that control. A firm that approves a promotion for an unauthorised issuer must keep monitoring it for as long as it is communicated and obtain a quarterly attestation that nothing material has changed (COBS 4.10.2R(1A) and (1B)). And the statement says that in some cases “only part of your money is used for the investment itself”, the rest paying introducers, marketing and staff, so the investment may need to perform very well just to return the capital.

Those are the economics of the SVS case in this issue’s Enforcement Watch, where bond operators paid a discretionary manager commission of up to 12% of client money invested and one issuer recovered the cost by adding it to its borrowers’ loans. The FCA asks banks, payment firms, lawyers, accountants and auditors involved in getting these investments to consumers to report concerns, says it has issued more than 1,200 warnings so far this year, and notes that its Perimeter Report has asked the government to review the exemptions that let high-risk investments be promoted outside FCA rules.

I read the security trustee passage as aimed at authorised firms as much as at consumers. A firm acting as trustee on an unregulated note should have a contractual limit on how the issuer describes it, a right to see promotional material before it is used, and someone checking what is published. No rule requires any of that, but the FCA has now said publicly what it thinks the wording is used for.

Primary Market Bulletin 65 warns issuers off marketing copy in RNS announcements and sets out short selling emergency powers

MEDIUM RISK · Sectors: Listed Companies, Hedge Funds, Asset Management

Primary Market Bulletin 65, published by the FCA on 28 August 2026, records supervisory observations and expectations for primary market participants. It is relevant to listed investment companies and trusts as issuers, and to hedge fund managers through its section on short selling powers.

Its main item is a warning about regulatory announcements. The FCA has seen a growing number that use vague, exaggerated or “flamboyant” language, are released more often than their content justifies, are marked as containing inside information when they almost certainly do not, and coincide with very significant share price rises. Regulated information must be disseminated through a Regulatory Information Service (DTR 6.3.3R). An issuer must take reasonable care that what it notifies is not misleading, false or deceptive and omits nothing likely to affect its import (UKLR 1.3.3R, mirrored in DTR 1A.3.2R). Listing Principles 1 and 6 in UKLR 2.2.1R require adequate systems and controls and communication that avoids a false market, and UK MAR Article 17(1) provides that an issuer “shall not combine the disclosure of inside information to the public with the marketing of [their] activities”. Marketing can go through non-regulatory newswires, though UK MAR can reach a misleading statement however it is disseminated, and the FCA “will consider taking action” where announcements fall short.

The bulletin also reports the FCA’s review of notifications of delayed disclosure under UK MAR Article 17(4), which found no widespread or systemic failure. It did find issuers treating all information held during periodic reporting as inside information by default, contrary to Technical Note 506.3, issuers not reassessing during long delays, and one issuer assuming that a closed period meant inside information existed. RegTech tools and outsourced company secretarial systems, once information had been classified as inside information, opened insider lists and filed delay notifications without a meaningful opportunity to reassess. Where an issuer used a short delay under DTR 2.2.9G(2) to clarify an unexpected event, the FCA did not consider a separate delay notification necessary.

For hedge funds, the bulletin explains the emergency powers in the Short Selling Regulations 2025, whose rules came into force on 13 July 2026. Regulation 13 lets the FCA require notification of net short positions below the standard 0.2% threshold and reporting of positions in other instruments that benefit from price falls; regulation 15 lets it prohibit or impose conditions on short selling; regulation 17 lets it restrict short selling in an instrument after a significant fall in price. The FCA says it will apply a high bar and will publish an Emergency Powers Notice setting out the measures, instruments, duration and reasons. A manager that cannot report positions at a lower threshold, including derivatives, at short notice would find that out in the kind of market in which the powers are used. Separately, from 21 September 2026 every new equity case submitted through the FCA’s Electronic Submission System, including guidance requests, must include the new inside information declaration form, without which the FCA will not allocate the case.

Automated MAR tooling is easy to mistake for a strong control. A tool that opens an insider list and files a delay notification whenever someone classifies information as inside information looks rigorous, and the FCA has now described it as a source of error. I’d want a listed fund’s disclosure committee to know who can stop a filing before it goes, and whether anyone ever has.

Bank of England & PRA

Treasury plans a secondary payments innovation objective for the Bank of England, subordinate to financial stability

INFO · Sectors: Payments, Digital Assets, Banking

HM Treasury announced on 27 August 2026 that it will give the Bank of England a secondary objective to support innovation in payment systems and emerging forms of digital money. The change is to be made by amendments to the Financial Services and Markets Bill, which the release says will next be debated in the House of Lords on 7 and 9 September. The release is a statement of intent: it does not include the amendment text, and nothing changes until the Bill is passed.

The release sets out the objective’s shape. It will sit below the Bank’s primary financial stability objective and “will not require the Bank to support innovation where doing so would undermine financial stability”. It extends an existing model: the Financial Services and Markets Act 2023 gave the Bank a secondary innovation objective when regulating central counterparties and central securities depositories, and the new objective applies the same approach to systemic payment systems, including those using digital settlement assets such as stablecoins. The Bank will report to Parliament each year on how it has advanced the objective. Sarah Breeden, Deputy Governor for Financial Stability, welcomed the announcement.

Its effect will turn on the drafting of the amendment, which will set out what the Bank must do in pursuit of the objective, and on what the Bank’s first annual report shows it has weighed. Neither is available yet. For asset managers the relevance is indirect for now. It grows if tokenised fund units come to settle in systemic stablecoins, whose regulation the Bank set out in draft in its policy statement and draft rules of 22 June 2026, alongside the joint FCA and Bank approach we noted in Issue 23.

Bank of England defers its whole November 2026 RTGS and CHAPS standards release after Swift’s delay

LOW RISK · Sectors: Payments, Banking, Asset Management

The Bank of England said on 27 August 2026 that it will defer, in its entirety, the RTGS standards release planned for November 2026, including the messaging standards for CHAPS payments. The decision follows Swift’s announcement the same day that it will delay its November 2026 Standards Release, after industry asked for more time to prepare for the removal of the unstructured postal address format from ISO 20022 payment messages because of concerns about global readiness.

The Bank gives two reasons: maintaining global alignment to preserve interoperability, and avoiding the risks of separating changes at a late stage, given that Swift has delayed its entire CBPR+ standards release. Because the whole release is deferred, every change planned for November moves with it; the statement does not list them. No new date has been set. The Bank will engage Swift, other market infrastructures and RTGS participants and publish revised timelines on its ISO 20022 pages.

For firms whose payments go through CHAPS, including fund managers, administrators and transfer agents paying redemption proceeds or receiving subscriptions through their banks, the change that has moved is the end of unstructured addresses. It has been postponed for an unknown period, not withdrawn. Firms whose client and investor records hold addresses as free text, outside the structured fields ISO 20022 uses, have more time to fix the data. Nothing in the Bank’s statement suggests the requirement itself will change.

Fund Launches & Capital Raises

L&G WTW Private Credit Access LTAF approved, with dealing no more than monthly on at least 90 days’ notice

INFO · Sectors: Private Credit, Asset Management, Wealth Management

The FCA register lists the L&G WTW Private Credit Access LTAF as an approved sub-fund long-term asset fund with effect from 26 August 2026, product reference 1062882. Investment Week reported the approval of the Legal & General and WTW fund on 28 August; it sits within an L&G umbrella.

The LTAF rules fix the dealing terms. The authorised fund manager must be a full-scope UK AIFM (COLL 15.2.2R). Redemptions can be dealt with no more often than monthly, and the notice period must be at least 90 days after the redemption request is accepted (COLL 15.8.12R). Units in an LTAF are a restricted mass market investment, so promotions to retail clients are subject to COBS 4.12A. In PS26/17 on 13 August, covered in Issue 26, the FCA said it will soon consult on liquidity rules for authorised funds in illiquid assets, including “some minor rule changes” to the LTAF regime. What a pension scheme or platform cannot read off the rules is how the manager values private loans between monthly dealing points and how it will run the 90-day queue if many investors give notice together.

Aberdeen proposes folding two UK property funds into a £700m global hybrid, with unitholders voting by 30 October

INFO · Sectors: Asset Management, Wealth Management

Aberdeen Investments put a proposal to investors on 25 August 2026 to combine the abrdn Real Estate Fund and the abrdn Real Estate Feeder Fund with the abrdn Global Real Estate Fund, creating a global hybrid real estate fund of more than £700 million that holds direct property in the UK and abroad alongside listed REITs and property companies, Scottish Financial News reported. Investors have until 30 October to vote, and completion is expected in November, subject to approval. The FCA register lists the Global Real Estate Fund as a non-UCITS retail scheme authorised unit trust operated by abrdn Fund Managers Limited, and the other two as NURS sub-funds.

A merger of this kind is a scheme of arrangement. Under COLL 7.6.2R it cannot be implemented without an extraordinary resolution of the transferring fund’s unitholders, which in COLL means at least three-quarters of the votes validly cast; for a sub-fund the vote is at sub-fund level, with an umbrella-level vote as well unless the scheme is unlikely to materially prejudice holders in other sub-funds. COLL 4.3.5G treats a scheme of arrangement as likely to be a fundamental change. Aberdeen links the proposal to the FCA’s plan to consult on notice periods for funds with substantial direct real estate exposure, and says the Global fund’s move to 45% direct, 45% indirect and 10% cash “appears consistent with” it. PS26/17 says that consultation, aimed predominantly at daily-dealt property funds, is coming soon. Whether a 45% direct allocation would attract a notice period depends on thresholds the FCA has not yet proposed.

Albion’s three VCTs publish a prospectus to raise up to £60m, with the manager’s 3% offer fee cleared as a related party transaction

INFO · Sectors: Private Equity, Listed Companies, Wealth Management

Albion Enterprise VCT PLC, Albion Technology & General VCT PLC and Albion Crown VCT PLC announced on 18 August 2026 that they had published a prospectus for top-up offers of new ordinary shares in the 2026/27 tax year. They aim to raise up to £40 million in aggregate, £15 million each for Enterprise and Technology & General and £10 million for Crown, with over-allotment facilities of up to a further £20 million. The offers open on 7 September 2026 and are expected to close by 2 April 2027 unless fully subscribed earlier. The prospectus has been submitted to the National Storage Mechanism under the FCA’s PRM sourcebook.

AlbionVC LLP, the companies’ investment manager, will receive 3% of gross proceeds and pay the costs of the offers out of it, and the listing rules apply to that fee. For a closed-ended investment fund the investment manager is a related party (UKLR 11.5.3R), and where any percentage ratio exceeds 0.25% the related party procedure in UKLR 8.2.1R(1) to (4) applies (UKLR 11.5.4R(1)): board approval before the arrangement is entered into, no vote for conflicted directors, a sponsor’s written confirmation that the terms are fair and reasonable for shareholders, and an RIS announcement. Each board says it considers the fee fair and reasonable and has that confirmation from its sponsor, Howard Kennedy Corporate Services LLP. With the manager on both sides of the fee, the sponsor’s letter and the approval of directors without a conflict are the checks shareholders are relying on.

Enforcement Watch

Former SVS Securities chief executive fined £56,400 and barred from senior roles after the FCA drops its integrity finding

MEDIUM RISK · Sectors: Wealth Management, Asset Management, Retail Distribution

Demetrios Christos Hadjigeorgiou, chief executive of SVS Securities Plc from 1 May 2018 and an approved director from January 2017, has been fined £56,400 under FSMA section 66 and prohibited under section 56 from any senior management or significant influence function, by a final notice dated 17 August and published on 19 August 2026. He had referred the FCA’s decision notice of 25 April 2024 to the Upper Tribunal, then withdrew the reference when the parties settled. SVS’s head of risk and compliance, David Stephen, has referred his own decision notice, so the findings about him are provisional.

SVS ran model portfolios into which 879 retail customers, most of them transferring pensions into SIPPs and some from defined benefit schemes, invested £69.6 million (the notice’s summary says £69.1 million). Around 63% went into fixed income: high-risk bonds and preference shares that the notice ties to connected persons and business associates of SVS, most of whose issuers paid SVS commission of 9% to 12% of the money invested. The finding is a breach of Statement of Principle 6, due skill, care and diligence in managing the business, between 3 January 2018 and 2 August 2019. The notice measures his conduct against SVS’s obligations under the conflicts rules in SYSC 10.1, the ban on third-party commission for portfolio management services to retail clients in COBS 2.3A.15R, the distributor duties in PROD 3.3 and the duty in COBS 11.2A.31R to notify clients of material changes to execution arrangements.

After the FCA raised concerns about due diligence and concentration in CFBL bonds in November 2017 and January 2018, SVS promised on 1 February 2018 to reduce the concentration. At a board meeting on 14 March 2018, which Mr Hadjigeorgiou chaired, it resolved that half of available fixed income cash could still go into CFBL products, and it invested a further £5,106,150 in one CFBL series between 31 January and 11 May 2018. In November 2018 SVS agreed to invest £10 million of client money in a bond issued by Innovation Capital Finance Limited for £1 million of commission, took £750,000 of it up front while short of cash and booked it as a loan, all before any due diligence. The same month the board, including Mr Hadjigeorgiou, introduced a 10% mark-down on fixed income sold when clients disinvested, to earn income. Staff objected on nine dated occasions between 2 November 2018 and 13 February 2019. Clients were told in writing only on 30 May 2019, and then only of a “wider spread”. SVS earned £359,800 on £5,784,000 of disinvestments.

The decision notice had proposed £84,600. The FCA then accepted that his part in the mark-down should be treated as a breach of Statement of Principle 6 rather than Statement of Principle 1, integrity, with no change to the facts found. The final figure is 20% (seriousness level 3) of relevant income of £282,243, or £56,448, rounded down to £56,400. There is no disgorgement, no Step 3 or Step 4 adjustment and no settlement discount, because the agreement came after stage 1 (DEPP 6.7.3G(3)). The penalty is payable in 48 monthly instalments of £1,175 from 1 September 2026. The prohibition is limited to senior management and significant influence functions and rests on a serious lack of competence and capability; there is no finding of dishonesty.

Paragraph 4.83 records the decision point. Mr Hadjigeorgiou had “some sympathy” with the staff concerns and thought a charge that fell with time invested would be fairer, but “declined to make a substantive decision about fairness to SVS’s clients, deferring to Compliance’s unreasonable assurance”. The FCA treated that deference as part of his failure. Since 31 July 2023 a change of that kind would also be tested against the Consumer Duty’s price and value outcome in PRIN 2A.4. A firm can check its position by taking every change to exit, switching or disinvestment charges since that date and asking for the fair value assessment, the name of the senior manager who approved the change, and the record of internal objections and how each was answered.

Compliance senior manager banned after a court found he lied in director disqualification proceedings he never reported to the FCA

MEDIUM RISK · Sectors: All Regulated Firms, Consumer Finance

In a final notice dated 17 August and published on 18 August 2026, the FCA withdrew Howard Roland Duckett’s approval to perform the SMF3 executive director and SMF16 compliance oversight functions at Beauforce Corporation Limited, a debt management firm, under FSMA section 63, and prohibited him from any function in relation to regulated activities under section 56. There is no financial penalty. The decision notice was dated 2 May 2025; Mr Duckett referred it to the Upper Tribunal on 2 October 2025, and the reference has since been struck out.

The case does not arise from his work at Beauforce. On 13 November 2020 the High Court disqualified him from acting as a company director for ten years, with effect from 4 December 2020, because as de facto director of an unrelated company he had failed to ensure it kept adequate accounting records. In its judgment the court found that he had lied on oath, relied on six invoices it found to be fabrications, and attributed the company’s emails to “Individual A”, whom it found to be fictitious. Mr Duckett remained an approved senior manager throughout and did not tell the FCA he had been disqualified, which the notice treats as a failure to meet COCON 2.2.4R, senior manager conduct rule SC4.

The notice relies on FIT 2.1.3G, which lists adverse findings in civil proceedings and director disqualification among the matters relevant to honesty, integrity and reputation. Mr Duckett argued that the proceedings were not criminal, that no finding of fraud was made and that the suspected VAT fraud was never proved. The FCA accepted that the disqualification proceedings were not brought on the basis of fraud and relied instead on the judge’s findings about the evidence he gave. The ban therefore rests on how he conducted his defence in civil proceedings; the notice makes no finding about his conduct towards Beauforce’s customers or against Beauforce itself, which the FCA restricted in November 2025 and ordered to return money it held for consumers.

FSMA section 63(2A), summarised in SUP 10C.14.24G, requires a firm at least once a year to consider, for every SMF manager approved on its application, whether there are grounds on which the FCA could withdraw the approval. A director disqualification is on the public record, so in my view each senior manager’s annual file should show a dated external search of the disqualified directors register as well as the individual’s own declaration.

Market Developments

High Court stays the FCA’s financial promotion claim against HTX’s operator until 8 September for settlement talks

INFO · Sectors: Digital Assets, All Regulated Firms

The High Court has stayed the proceedings in FCA v Huobi Global S.A. and others until 8 September 2026 so that the FCA and Huobi Global S.A., the Panamanian company the FCA says operates the HTX cryptoasset exchange, can try to settle. The consent order was made on 24 August by Master Marsh, sitting in retirement in the Financial Services and Regulatory sub-list, and published by the FCA on 26 August. If they settle they must lodge a draft consent order; if not, the ordinary Civil Procedure Rules apply when the stay ends. There is no order as to costs.

This is the third stay. On 31 March the court stayed the claim for three months and on 25 June for a further two, each time allowing either side to end the stay on two weeks’ notice. The August order runs for about two weeks and has no such clause. The claim was issued on 21 October 2025, and on 4 February 2026 the FCA obtained permission to serve out of the jurisdiction and by email. The case continues against the background of the FCA’s application period for the new cryptoasset regime, which opens on 30 September.

Nothing has been decided on the merits, and the FCA’s case is pleaded, not proven. Its particulars of claim allege that HTX communicated financial promotions for qualifying cryptoassets and cryptoasset derivatives in breach of FSMA section 21, and seek a declaration and an injunction under section 380 and section 37 of the Senior Courts Act 1981 against the company and several classes of persons unknown, including anyone who becomes a controller of the exchange on or before 31 October 2028. HTX told the FCA in October 2024 that it had stopped targeting UK customers. The FCA’s answer rests on section 21(3), which applies the restriction to a communication from outside the UK if it is capable of having an effect here, and on the conditions in Article 12 of the Financial Promotion Order for treating a communication as directed only at persons outside the UK. It pleads that the website was in English, accepted sterling and UK driving licences, received 4.6 million UK visits in 2023, and did not stop an FCA employee using a UK IP address from buying cryptoassets and trading futures.

A firm that relies on an overseas-only disclaimer, whether an offshore manager with a public website or a UK manager marketing a non-UK fund, can read paragraphs 21 to 27 of the pleading as the FCA’s account of what makes such a disclaimer untrue: pages accessible from the UK, sterling payments and UK identity documents accepted at onboarding, and no system to stop UK residents dealing.

Regulatory Calendar

August–September 2026

1 Sep COCON 1.1.7FR comes into force, extending the conduct rules to specified unwanted conduct towards colleagues at SMCR firms other than banking firms.
7 & 9 Sep House of Lords debates the Financial Services and Markets Bill, the vehicle HM Treasury has named for the Bank of England’s payments innovation objective.
8 Sep Stay in FCA v Huobi Global S.A. ends unless the parties settle.
16 Sep FCA CP26/27, remuneration reform for solo-regulated firms, closes.
17 Sep MPC announcement and minutes.
18 Sep CP26/28 discussion chapters other than prudential close; CP26/23, Consumer Duty scope and proportionality, closes; CP26/31 views on consolidated tape provider contract terms due.
30 Sep FCA application period for the new cryptoasset regime opens. FPC Record published.

October 2026

6 Oct FCA Annual Public Meeting, Edinburgh and online.
Oct FCA to publish the draft schema, validation rules and guidelines for the new transaction reporting regime (PS26/15), with a consultation on transitional provisions.
16 Oct CP26/30 (equity market transparency) and the consultation chapter of CP26/31 (systematic internaliser quotes in the consolidated tape) close.
22 Oct CP26/26 (FRAME) closes, and CP26/28 (UK AIFM regime) closes for the consultation chapters and the prudential discussion chapter.
30 Oct Voting deadline on Aberdeen’s proposed merger of its UK real estate funds.

November 2026

5 Nov MPC announcement and November Monetary Policy Report.
Nov Aberdeen real estate fund merger expected to complete, subject to unitholder approval.
26 Nov Financial Stability Report and FPC Record.

Key dates later in 2026 and beyond

17 Dec 2026 MPC announcement and minutes.
End 2026 FCA aims to publish further FRAME prototype reporting forms.
Q1 2027 FCA anticipates the remuneration policy statement (CP26/27); new rules would apply from the day after publication, for AIFMs in two stages.
1 Feb 2027 PS26/17 fund liquidity rules come into force; some transitional provisions run to 1 August 2027.
28 Feb 2027 FCA application period for the cryptoasset regime closes.
25 Oct 2027 New UK cryptoasset regime starts.
3 Apr 2028 New UK transaction reporting regime under PS26/15 comes into force.

Question of the Week

List every class of shares, voting or not, in our firm and in each parent, held by any person or vehicle that is not on the FCA’s record of our controllers, with the percentage of allotted shares each represents. For any holding of 10% or more, show us the analysis on which we concluded that no notice under section 178 was needed, who signed it off, and when it was last reviewed.

We’d welcome your perspective. The best responses may feature in a future edition.

Insight

Read together, this fortnight’s enforcement documents share a feature: in each, the economics of an arrangement differed from what the formal record showed. Dolfin’s visa fees never reached its audited accounts, and the individuals’ benefits came through other group companies. On the FCA’s case, which he contests, Mr Joukovski’s influence sat in non-voting shares held by a foundation, outside the controller record. SVS booked a bond issuer’s commission as a loan and described a 10% mark-down to clients as a “wider spread”. The FCA’s mini-bond statement describes the same gap from the investor’s side, where the advertised return depends on how much of the money reaches the investment.

In each case the FCA looked through the form to the economics, and its tools are being adjusted to make that easier. A deterrence multiplier reached group-company benefits that the relevant-income step could not, and CP26/19 would write that approach into DEPP in terms. The Joukovski notice reads section 422 by its words, and section 422(4)(a) draws no line between shares that vote and shares that do not. I think that reading is more likely than not to be upheld, though the Tribunal will decide, and I wouldn’t plan on it being wrong.

The response need not be elaborate. A board needs three reconciliations it can inspect: revenue by business line against the audited accounts, the shareholder register by economic interest against the controller notifications, and every payment the firm or its people receive from third parties against the rule that permits it. In my view the first two would have put Dolfin’s arrangements in front of the advisory board and control functions that the notices say were never told, and the third would have made SVS’s board set its commission income against COBS 2.3A.15R.

Asad Bukhory | Founder, Artizan Governance