TanyaT
19th August 2005, 13:57
Update on MUST FSA etc
You are probably all wondering why there is a delay in getting MUST up and running. Our lawyers registered the application with the FSA on 20 July and yesterday, we received a letter from the FSA to our lawyers, asking a whole series of questions about our operations going forward. These questions cover legal aspects of: our taking deposits, running a ‘collective investment scheme’, promoting Phoenix Fund etc. These questions need answering before they will process the registration of MUST.
The FSA is a regulatory body which is responsible for ensuring that financial services are promoted and sold through firms and companies that are ‘authorised’ – that is, either the individual concerned has passed a test, or the firm itself is subject to qualifications, financial controls and audit requirements set out in the law. SU/MUST does not necessarily have to go through this process, as long as we operate through persons or firms who are authorised under FSA regulations.
Up to now, we have been operating SUSS on the basis that we did not need FSA authorisation ourselves, basically because we were not carrying on investment business (buying and selling shares for profit), we were running a scheme for ‘emotional’ investment on behalf of our members, buying shares for members through an authorised broker once a month regardless of price, in a single company – United.
And we have had various lawyers and financial advisers (including United and Brewin Dolphin) look at our operations in the past and no-one has objected to how we were doing things or refused to work with us because we did not conform to regulation. So we have carried on and run ourselves very professionally (no member has made a complaint about us as far as we know, so that is a testament to Duncan and the strength of the way we have been operating).
As we have been winding up SUSS, and starting to plan and structure the Phoenix Fund, we have been conscious that the change in the nature of SU/MUST – asking people for cash rather than buying shares for them - would mean that we would have to have tighter regulation on our activities. The FSA letter does not come as a surprise. We were already talking to an FSA-authorised financial services company, Capital Partners Group, who have offered their services as ‘fund manager’ for Phoenix, which would help bring us within the regulations. We have also been talking to building societies which would be offering our members financial products such as individual savings accounts and bonds, so that we would not be offering these products directly ourselves. We are also consulting our lawyers.
So we have been careful, we know we need to operate on a properly authorised basis. The FSA questions are ones we have to deal with at some point, it is just annoying that we cannot register MUST immediately and deal with the legal issues as we went along. This will take a few weeks to sort out, we can’t say exactly how long, but we need to be sure that everything we do is being done properly and legally. We will postpone the MUST launch until we have everything in place and will be working hard to get it done asap. Logo and new website are coming along well, so it is all falling into place. There will be a cost of course, paying for lawyers etc to make sure we get it right.
We know that there is frustration among our membership about the slow pace of progress, the perceived lack of communication and activity ‘at the top’. Please put this in perspective. For the last 4 years we have been riding a roller-coaster of a campaign, where we have had frantic bursts of activity, constant publicity for whatever we said and generally being engaged in a war with all the highs and lows, victories and defeats. That phase is now over, all fans groups are in flux & transition. For SU, the anti- campaigning now takes a back seat to the positive, constructive, platform-building phase which is unglamorous, slow and painful for all of us who know & prefer the high octane life. But this is the new reality, if we want to be there when our club comes up for sale. We have to slowly build the blocks so that when the day comes, we are there. And the platform has to be legally sound.
SU has always tried to ride the two horses of being a superb anti-takeover campaigning group and becoming a significant fans’ stakeholder in our club. It’s not easy to be ‘against’ and ‘for’ at the same time, but I personally think we have managed to combine them brilliantly. Both of these aims are now in abeyance, we have lost the immediate battle on both counts – but we have not lost the war. We have to change our tactics and strategy, think long-term, plan and build for the future, while keeping our independence aim alive for our members and for all United fans. Perseverance and patience is needed from everyone, this has become a marathon not a sprint.
This is going to be a very difficult period of time but if we come through it successfully (and knowing the organisation, the people and the talents involved we certainly will) nothing will stand in our way.
You are probably all wondering why there is a delay in getting MUST up and running. Our lawyers registered the application with the FSA on 20 July and yesterday, we received a letter from the FSA to our lawyers, asking a whole series of questions about our operations going forward. These questions cover legal aspects of: our taking deposits, running a ‘collective investment scheme’, promoting Phoenix Fund etc. These questions need answering before they will process the registration of MUST.
The FSA is a regulatory body which is responsible for ensuring that financial services are promoted and sold through firms and companies that are ‘authorised’ – that is, either the individual concerned has passed a test, or the firm itself is subject to qualifications, financial controls and audit requirements set out in the law. SU/MUST does not necessarily have to go through this process, as long as we operate through persons or firms who are authorised under FSA regulations.
Up to now, we have been operating SUSS on the basis that we did not need FSA authorisation ourselves, basically because we were not carrying on investment business (buying and selling shares for profit), we were running a scheme for ‘emotional’ investment on behalf of our members, buying shares for members through an authorised broker once a month regardless of price, in a single company – United.
And we have had various lawyers and financial advisers (including United and Brewin Dolphin) look at our operations in the past and no-one has objected to how we were doing things or refused to work with us because we did not conform to regulation. So we have carried on and run ourselves very professionally (no member has made a complaint about us as far as we know, so that is a testament to Duncan and the strength of the way we have been operating).
As we have been winding up SUSS, and starting to plan and structure the Phoenix Fund, we have been conscious that the change in the nature of SU/MUST – asking people for cash rather than buying shares for them - would mean that we would have to have tighter regulation on our activities. The FSA letter does not come as a surprise. We were already talking to an FSA-authorised financial services company, Capital Partners Group, who have offered their services as ‘fund manager’ for Phoenix, which would help bring us within the regulations. We have also been talking to building societies which would be offering our members financial products such as individual savings accounts and bonds, so that we would not be offering these products directly ourselves. We are also consulting our lawyers.
So we have been careful, we know we need to operate on a properly authorised basis. The FSA questions are ones we have to deal with at some point, it is just annoying that we cannot register MUST immediately and deal with the legal issues as we went along. This will take a few weeks to sort out, we can’t say exactly how long, but we need to be sure that everything we do is being done properly and legally. We will postpone the MUST launch until we have everything in place and will be working hard to get it done asap. Logo and new website are coming along well, so it is all falling into place. There will be a cost of course, paying for lawyers etc to make sure we get it right.
We know that there is frustration among our membership about the slow pace of progress, the perceived lack of communication and activity ‘at the top’. Please put this in perspective. For the last 4 years we have been riding a roller-coaster of a campaign, where we have had frantic bursts of activity, constant publicity for whatever we said and generally being engaged in a war with all the highs and lows, victories and defeats. That phase is now over, all fans groups are in flux & transition. For SU, the anti- campaigning now takes a back seat to the positive, constructive, platform-building phase which is unglamorous, slow and painful for all of us who know & prefer the high octane life. But this is the new reality, if we want to be there when our club comes up for sale. We have to slowly build the blocks so that when the day comes, we are there. And the platform has to be legally sound.
SU has always tried to ride the two horses of being a superb anti-takeover campaigning group and becoming a significant fans’ stakeholder in our club. It’s not easy to be ‘against’ and ‘for’ at the same time, but I personally think we have managed to combine them brilliantly. Both of these aims are now in abeyance, we have lost the immediate battle on both counts – but we have not lost the war. We have to change our tactics and strategy, think long-term, plan and build for the future, while keeping our independence aim alive for our members and for all United fans. Perseverance and patience is needed from everyone, this has become a marathon not a sprint.
This is going to be a very difficult period of time but if we come through it successfully (and knowing the organisation, the people and the talents involved we certainly will) nothing will stand in our way.