InvestmentsFeb 24 2015

Aviva Investors fined £17.6m for dealing control failures

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Aviva Investors fined £17.6m for dealing control failures

The FCA has fined Aviva Investors £17.6m for breaching regulatory requirements in its dealing controls that meant it “failed to manage conflicts of interest fairly”.

In addition to the fine, Aviva Investors had previously had to pay out compensation of £132m to ensure none of its funds were adversely affected.

The system failures occurred between August 2005 to June 2013 and mainly related to the firm’s fixed income desk.

The FCA said the way performance fees were paid to traders on the fixed income desk encouraged them to favour certain funds over others.

In May 2013, the firm found that two of its former fixed income traders had been “delaying the booking of, and improperly allocating, trades”.

This led to the firm paying out the compensation and reporting the system failures to the FCA.

The firm said it “unreservedly” accepted the regulator’s decision on its conduct and had “cooperated fully with the FCA during its investigation”.

The FCA said while the breaches at Aviva Investors had been “serious”, its actions since identifying the failures had been “exceptional” and it had made “significant improvements to its governance and control framework” since identifying the problems.

Euan Munro, chief executive officer of Aviva Investors, said: “We fully accept the conclusions of this investigation. We have fixed the issues, improved our systems and controls, and ensured no customers have been disadvantaged.

“We have also made substantial changes to the management team which is leading the turnaround of Aviva Investors.”