According to the FSA, BIM did not put trust letters in place for certain money market deposits, while also failing to take sufficient care of activities regarding the identification and protection of client money.

BIM confirmed the charges in a statement and told PBI that the matter was now closed.

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

The FSA’s client money rules state that firms must have a trust letter from any bank holding its client money to ensure that, if the firm becomes insolvent, this money is easily identifiable.

The money must also be ring-fenced from the firm’s own assets so it can be quickly returned.

BIM, one of the world’s largest asset managers, allegedly failed to obtain letters relating to some money market deposits placed with third party banks from 1 October 2006 to 31 March 2010.

The FSA’s statement added that the average daily balance affected by this failure was more than £1.36bn.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

However, the UK regulator concluded that the error was not deliberate and that BIM had reported the problem to the FSA.

The FSA also said that no clients actually lost money as a result of the error, and that BIM has since remedied the situation while putting in place strong systems and controls concerning client money protection.

BIM have said that a dedicated client money team had been established, led by a managing director responsible for oversight of BIM’s client money obligations.

The firm agreed to settle at an early stage and received a 30% discount on the penalty.

Without the discount BIM would have been forced to pay the FSA £13.6m.

 

Source: Private Banker International