The regulator ordered the firm to cease carrying out regulated activities under a client money order
Coventry-based broker Inspire Insurance Services has been shut down by the FCA under a client money order – the firm must cease all regulated activities, including not initiating any further business.
Prior to the order, Inspire was authorised to handle client money. Specifically, it was able to “hold and/or control client money but only for its insurance distribution activities. It cannot lend this money, unless permitted to under FCA rules, or use it to finance its own business.”
However, effective since 23 October, the FCA instructed Inspire to cease all regulated activity pursuant to section 55L of the Financial Services and Markets Act 2000.
As well as ceasing to carry out any regulated activities and ensuring to secure all books and records in order to preserve the firm’s information, the order further required Inspire to “ringfence relevant funds in an appropriate account”.
This meant that the firm had to “immediately ensure that all relevant funds are appropriately ringfenced in a designated client money account or trust account. For the avoidance of doubt, if this requires a transfer between accounts, this may only be done with the prior written consent of the Authority.”
The business must also “not deal with or diminish the value of assets or funds”, meaning that it could not “dispose of, withdraw, transfer, deal with or diminish the value of any of its own assets, and any client money or other funds it holds”.
The broker additionally had to notify its customers, insurers and other business parties of the FCA’s order – this included putting information on its website.
The homepage of Inspire’s website now shows the details of the FCA’s order. The broker further encourages its customers to contact their insurer or trade body Biba for help with their current policy or any policy renewals.
The firm wrote: “We sincerely apologise for the position this will put you in and would advise you that you will need to find an alternative broker to service your requirements moving forward.”