Aberdeen Asset Management has said that the assets that it failed to properly protect, resulting in a giant £7.2m fine for the group, were held on behalf of institutional investors.
Aberdeen’s fine, for failing to file the proper paperwork to protect assets held in ‘money market deposits’ with certain banks, was revealed by the FCA this morning.
A spokesperson for the asset manager said the money market deposits were held within the cash balances of institutional funds and segregated accounts, not by retail funds.
The FCA this morning said the rule breach meant that, had Aberdeen been declared insolvent, clients could have faced delays receiving their money back or even suffered losses.
Aberdeen has also released a statement in response to the fine.
“No clients suffered any loss as a result of the breaches and at no point were client funds mixed with the Aberdeen’s own money,” it said.
“Nor was there any risk of any client money being lost as a result of setoff, as Aberdeen did not have any borrowings with any of the relevant banks, although there was a risk that clients could have potentially faced a delay in the return of their money in the highly unlikely event that Aberdeen became insolvent.
“We regret that the situation arose, have co-operated fully with the FCA in the course of its investigation and have amended our UK procedures regarding bank deposits following the FCA’s guidance.”
Aberdeen agreed to settle the case with the FCA early, qualifying for a 30 per cent discount to its fine, which otherwise would have been £10.3m.
Both JPMorgan and BlackRock have also been fined for similar offences by previous regulator the FSA.
BlackRock paid £9.5m in September 2012 while JPMorgan Securities was hit with a £33.3m fine in June 2010 - at the time the largest ever fine handed down by the UK regulator.
