The fund management group failed to identify, and therefore properly protect, client money placed in money market deposits (MMDs) with third-party banks between September 2008 and August 2011. The average daily balance in these deposits was £685 million.
The FCA said in its ‘Final Notice’ ruling that Aberdeen did not obtain the correct documentation from third-party banks when setting up the accounts and used “inconsistent naming conventions… which created uncertainty over who owned these funds.”
“This left Aberdeen’s clients at risk of delays in having their money returned if Aberdeen became insolvent. Had debts been owed by Aberdeen to the third party banks providing the MMDs client money could also have been at risk of set-off,” the FCA said.
Aberdeen said in a statement that it had identified the mistakes and reported them to the regulator. It added that no clients suffered any loss and that no client was ever at any risk of set-off because the company had no borrowings with the relevant banks. Its UK procedures have been amended.
Because Aberdeen fully cooperated with the FCA and agreed to settle at an early stage, it qualified for a 30% discount in its fine, which would otherwise have been almost £10.3 million.
The FCA Final Notice can be found by clicking here
Aberdeen Asset Management PLC's press statement is here