SWM Limited (SWM) (2020-06-29)

Summary

This is a public statement issued by the Jersey Financial Services Commission (JFSC) under Article 25 of the Financial Services (Jersey) Law 1998, naming SWM Limited (SWM), a Class D investment business, as having materially contravened the Code of Practice for Investment Business (IB Code). It follows a JFSC investigation, a Board of Commissioners sanction, a successful Royal Court appeal that quashed part of the original sanction and remitted the matter for reconsideration, and the JFSC's subsequent reconsideration and reissued sanction.

• Inadequate due diligence records: SWM failed to maintain adequate contemporaneous records showing why investment recommendations were suitable and what due diligence was performed on products.
• Insurance failures: SWM failed to maintain adequate professional indemnity insurance (PII) commensurate with its business, and misunderstood notification obligations to insurers and the JFSC.
• Complaints handling: SWM showed a lack of integrity in handling two client complaints, including refusing to reopen a complaint despite a reporting professional's concerns and applying undue pressure to dissuade a client from complaining.
• Outcome: The Royal Court quashed part of the original sanction but upheld most findings; the JFSC reconsidered mitigating factors (including SWM's improved cooperation, remedial policy updates, and cessation of business) and concluded that issuing this public statement as a sanction was reasonable, proportionate and necessary.

SWM had already ceased investment business activity before 31 December 2019 and transferred all clients to new service providers as part of a JFSC-supervised cessation of business plan; the JFSC continues to supervise the company's closure. The statement is a completed enforcement action and does not impose new ongoing obligations on other firms.

Applies to

Investment Business (Class D), registered persons under the IB Code