Stuart Brothers

Stuart Brothers specialises in retail financial services regulation, particularly in relation to complaints handling and FCA Handbook DISP related matters.

Prior to joining Punter Southall Law, Stuart undertook an interim role as a legal counsel for the Financial Services Ombudsman (FOS). That role involved advising on a wide range of issues arising under DISP including ambit of FOS jurisdiction, application of fair & reasonable criteria, time limits, eligible complainant criteria, application of Consumer Duty principles, reviewing draft provisional and final decisions and judicial review actions.

Stuart’s FOS role followed 35 years experience in financial services regulation which included acting as a lawyer within the legal department of the AMP group of companies, managing director of London Life Limited and as director in the Banking & Finance group of KLegal (associated law firm of KPMG) where Stuart advised investment and banking clients on matters arising from the implementation of Financial Services & Markets Act 2000.

Stuart was also general counsel to a SIPP administrator for 17 years. Stuart also had a prominent role in litigation relating to the sale of interest rate hedging products from 2010, which included  writing an article for the Law Society Gazette on the regulatory review and redress scheme and giving a presentation to a joint party Parliamentary group on the topic. Stuart’s work on that area was quoted in the Telegraph and Financial Times.

Areas of expertise

• Complaints handling – case file reviews, final response letters, dealing with FOS, business process review into complaints handling for companies within AMP Group;
• Investment and pensions, particularly SIPP and SSAS products;
• Application and interpretation of FSMA/FCA Handbook;
• Regulatory perimeter issues, including RAO exemptions;
• FCA thematic reviews (Consumer Duty/suitability/non-standard investments);
• Defined benefit transfers – suitability (DBAAT), appointment of skilled persons under section 166 FSMA, redress methodology, section 404 scheme (BSPS);
• Intricate SM&CR/SYSC matter – issues raised by FCA Supervision Group in relation to governance structure of a wealth management LLP, in particular relating to scope of SMF27 roles and controller issues;
• FCA requests for information, including under section 165 FSMA;
• Threatened FCA action under section 176 FSMA (mortgage broker);
• Compliance with conduct of business rules (COBS, MCOB, ICOBS, FPCOB);
• Whistleblowing reports investigated by FCA;
• Remuneration structures, particularly post RDR;
• Issues arising from potential allegations of “phoenixing” and “lifeboating”;
• VREQ’s and OIREQ’s, including an insurance broker’s alleged non-compliance with CASS rules;
• Minimum capital requirements including IFPR and ICARA and issues arising from PI exclusions and wind down planning;
• Demarcation of responsibility for and supervision of appointed representatives;
• Introducer appointed representative agreements;
• Insurance Distribution Directive issues;
• Arrangements with non-regulated introducers (SIPP & SSAS clients);
• Structuring of cash flow planning company to fall within regulated activities exemptions in relation to investment platform arrangements;
• Implementation of Consumer Duty;
• FCA review into decumulation following pensions freedoms;
• With profits funds – actuarial discretions (guaranteed annuity rate products) and distribution of insurance long term fund; and
• Setting up of film finance scheme (non-CIS).

Regulatory Transactional Work

• Section 178 FSMA change in control issues, including challenges by FCA in relation both to disposers and acquirers;
• Regulatory due diligence – directly authorised firms, appointed representatives, SIPP administrators;
• Warranties and indemnities in share and asset sale agreements for FCA regulated entities;
• High profile disposals of an IFA and SIPP administrator (2022/23);
• Joint venture between IFA and fund manager for provision of discretionary fund management services;
• Agreements for white-labelling of platform services; and
• Responsible for regulatory due diligence exercise of UK subsidiaries of Australian Mutual Provident (AMP) for AMP’s listing on Australian Stock Exchange.

Financial Services Dispute Resolution

• Case on restraints in a pensions and actuarial services outsourcing contract Quantum Advisory Limited v Quantum Actuarial LLP in High Court [2020] EWHC 1072 (Comm) and Court of Appeal [2021] EWCA Civ 227;
• Interest Rate Hedging Product (IRHP) claims against investment banks, including cases against Barclays Capital and HSBC which were covered by Daily Telegraph (Harry Wilson);
• Application for the use of expert evidence in a IRHP mis-selling claim (Battrick v Royal Bank of Scotland plc [2013] EWHC 2277 (QB)); and
• LIBOR manipulation action (Longford Securities & Equities (K&T) Limited v Royal Bank of Scotland plc).