Financial Services Law: In the matter of CEART Risk Services Ltd (Ch) 3/5/12

The Claimant was authorised by the Financial Services Authority to carry on non-investment insurance intermediation. At a general meeting the company resolved to appoint administrators. Prior approval from the FSA was not obtained as stipulated by s. 362A of the Financial Services and Markets Act 2000. An issue arose as to whether the administrators’ appointment had been validated by the subsequent consent of the FSA or whether it was when such consent was filed at Court and the implications for the administrators’ acts prior to these steps. The court analysed the purpose of the statutory requirements and the importance of the requirement for prior consent. On its proper construction the failure to obtain the FSA’s prior consent was a curable defect in the appointment. The appointment of the administrators took effect only from the date of filing the FSA’s consent at court.