Unlike other financial professionals who have been under intense scrutiny by the regulator in the wake of the financial crisis, the fund firms and asset managers responsible for millions of pounds of clients’ cash have so far been spared the scrutiny.
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But after some of the recent probes by FSA uncovered some shortcomings in the industry, the regulator has turned its attention on them.
The main shortcomings in compliance that have been listed are lax in anti-money laundering controls, insufficient transaction reporting, poor checks on the suitability of investment recommendations and sloppy exchanges of price-sensitive information.
FSA has already demonstrated its stringent crackdown by fining private bank Coutts & Company an amount of GBP8.75 million accusing them of soft-touch handling of high-risk customers.
Smaller firms like Christchurch Investment Management and its compliance officer, David Thornberry has also been fined a total GBP38,150 for mishandling client cash.
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By GlobalDataMoreover, for the first time, the FSA banned Thornberry from acting as a compliance officer after having discovered that he had no formal training for the role and no awareness of the regulator’s rules for the protection of client assets, which were communicated in writing to all firms some months before.
Insider dealing being one of the lists of offences the FSA wants to crack down on, it fined J.P.Morgan Cazenove banker Ian Hannam an amount of GBP450, 000 for the same.
Simon Appleton, a director at regulatory consultancy Kinetic Partners was quoted as saying "Improper disclosure is one of the FSA’s seven deadly sins. If you suspect someone in your firm has breached one of these, you’re obliged to file a suspicious transaction report."
