Financial services

Section 235 of the Financial Services and Markets Act 2000 was not to be construed narrowly, but conservatively. The application of s 235 depended on the specific facts of the case as determined by the court. It was settled law that the Financial Conduct Authority did not have to prove breaches of the Act beyond reasonable doubt. Further, that “arrangements” had a wide meaning and might include non-contractual arrangements which existed on their own or on parallel with contractual arrangements. Section 235 referred to the “purpose or effect” of the arrangements. What mattered was the way in which the scheme was run in practice, not contractual terms, which might not reflect reality. It would be possible for investors’ participation in important decisions to justify finding that the operator’s management was not “as a whole” within s 235(3)(b), while not being sufficient to amount to day-to-day control within s 235(2). Equally, there was no reason to exclude the complete absence of any investor