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Screenshot of a breaking news alert e-mail from Q2 2017
Failure to comply with Client Money Rules costs the company almost $1.5 million
The Financial Conduct Authority has imposed a fine on SEI Investments Europe for breaching its so called Principle 10. The company has not protected the funds of its investors properly and has breached the standard practice of keeping customers’ money in segregated accounts separate from the firm’s assets. The rule is designed to serve as a backstop for clients in the event of a bankruptcy of the company.
In the period between November 2007 and October 2012 the company has failed numerous times to adhere to its own internal rules designed to ensure compliance with regulations and the action taken as a consequence is an FCA fine worth £900,200 ($1,456,000) including a 30% discount since SEI has agreed to settle.
According to the FCA the procedures that the company has been using to manage the amount of funds in the clients’ bank account have been poorly designed and personnel was poorly trained. On a single occasion an SEI employee failed to has manually adjusted the client money requirement to £932,000 from £14 mln on the assumption that the shortfall was an unprecedented amount and the numbers were not correct.
While violations were quite serious there has been no loss registered on clients’ accounts on this occasion. SEI has fully cooperated during the investigation and has also invested in external consultants to restructure its operational model. The Client Money Rules are designed to guarantee protection of the assets and firms are required to ensure compliance of their own internal procedures with FCA regulations.
For the full press release visit FCA’s website.