Jarvis securities division agrees FCA restrictions, appoints consultant

16th Sep 2022 14:45

(Sharecast News) - Jarvis Securities announced the appointment of regulatory consultancy Ocreus on Friday, to review the systems and controls of its subsidiary, Jarvis Investment Management (JIML).

The AIM-traded firm said it expected that the process would take three to six months, adding that further updates would be provided in due course "as necessary" once the skilled person had reported.

It said JIML had voluntarily agreed restrictions under the Financial Services and Markets Act, including that, for the time being, it would not accept new clients from some of its existing 'Model B' corporate clients without Financial Conduct Authority approval, until the skilled person provided sufficient assurance about the relevant systems and controls.

JIML would liaise with the Model B corporate clients affected, but the board said that should not impact existing clients.

It also agreed to an asset restriction, meaning dividends would only be paid to Jarvis with the FCA's approval.

Jarvis said the voluntary restrictions would not prevent JIML from providing services to current clients and paying its ordinary expenses and commissions, nor would they directly restrict any payment of dividends by the company.

"The outcome of the skilled person's review is not yet known but, in the meantime, the restrictions should have a limited impact on JIML's forecasted revenue and profitability as anticipated new business from Model B clients is not reflected or built into the published forecast," the board said in its statement.

"The additional professional fees and associated costs, and the asset restriction, however mean dividends payable to the company - and therefore dividends payable by the company - may be reduced or delayed pending FCA approval.

"JIML will continue to work with the skilled person and the FCA, with the aim of having the restrictions lifted as soon as possible."

At 1605 BST, shares in Jarvis Securities were down 37.84% at 115p.

Reporting by Josh White at Sharecast.com.