The Financial Conduct Authority has fined Aberdeen Asset Managers and Aberdeen Fund Management £7,192,500 ($11,200,328) for failing to protect client money.

The Financial Conduct Authority has fined Aberdeen Asset Managers and Aberdeen Fund Management £7,192,500 ($11,200,328) for failing to protect client money.

The FCA said in a statement that the firm had failed to adequately protect client money placed in money market deposits with third party banks between September 2008 and August 2011.

“Proper handling of client money is essential in ensuring that markets function effectively. Where they fall short of our standards, firms should expect the FCA to step in and take action to avoid a poor outcome for their clients, and ultimately, consumers,” said Tracey McDermott, director of enforcement and financial crime.

The average daily balance in money market deposits affected by this failure was £685 million.

According to the FCA, Aberdeen had incorrectly determined that this money was not subject to FCA rules, which meant that it did not obtain the correct documentation from third party banks when setting up the affected accounts.

The FCA added that Aberdeen had also used inconsistent naming conventions when setting up these accounts, creating uncertainty regarding the ownership of the funds and leaving clients at risk of delays in having their money returned if the firm became insolvent.

Aberdeen fully cooperated with the FCA’s investigation and agreed to settle at an early stage, qualifying for a 30 per cent discount to their fine. Without the discount the fine would have been £10,275,000.

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