The FCA has fined Aviva Pension Trustees UK Limited and Aviva Wrap UK Limited (Aviva) £8,246,800 (including a 30 per cent discount) for failing in its oversight of third party providers engaged to administer client money and conduct external reconciliation of custody assets.

Between 1 January 2013 and 2 September 2015, Aviva breached;

1. principles 3 (management and control) and
2. 10 (clients’ assets) of the FCA’s principles for businesses, rules in the FCA’s Client Assets Sourcebook (CASS) and
3. rules relating to outsourcing in the FCA’s Senior Management Arrangements, Systems and Controls sourcebook.

In particular, the FCA found that Aviva;

1. failed to have adequate control and oversight over the third party administrators to challenge their internal controls;
2. dedicated insufficient resources to identify potential CASS risks; and
3. had deficiencies in its internal controls for the segregation of client money.

Although the FCA considers the failings serious, clients did not suffer any loss.

Copies of the FCA’s final notice:  http://bit.ly/2dxO0GN

and the related FCA press release:   http://bit.ly/2djJEO3