The FCA yesterday fined both Credit Suisse International (CSI) and Yorkshire Building Society (YBS) in respect of their financial promotions for a structured deposit called the “Cliquet Product”.

The Cliquet Product is a capital protected four, five or six year structured deposit product which guarantees a minimum return.

In addition, if the sum of the returns of the FTSE Index over each six month period (with the return in each period capped and floored) exceed the minimum return, the product pays the sum of the FTSE returns.

The Cliquet Product was designed by CSI and sold through a number of distributors, with YBS being the distributor responsible for approximately 75 per cent of the total sums invested in the Cliquet Product for the period of the FCA’s investigation (1 November 2009 – 17 June 2012).

The FCA found that CSI’ and YBS’ financial promotions for the Cliquet Product breached Principle 7 of the FCA’s Principles for Businesses, as well as certain provisions of its Banking: Conduct of Business sourcebook.

In particular, the FCA found that the financial promotions marketed the potential maximum return on the product as a key promotional feature, despite the probability of achieving only the minimum return being 40-50 per cent and the probability of achieving the maximum return being close to 0 per cent.

The FCA fined

• CSI £2,398,100,
• YBS £1,429,000.

In addition, CSI and YBS have agreed to contact customers who bought the issues of the Cliquet Product available during the period of the FCA’s investigation (including some customers who purchased these issues immediately before this period).

Copies of the final notices for

CSI http://http://bit.ly/1slqH2U

And

YBS and related http://http://bit.ly/1jw9mus

press release are available. http://bit.ly/1r16wCU