FCA fines investment managers for not complying with investment limits

The FCA has fined Invesco Asset Management Limited and Invesco Fund Managers Limited (IFML) (together known as Invesco) £18,643,000 (including a 30 per cent discount) for failing to keep within investment limits, introducing leverage into certain funds without providing investors with proper disclosure about the risks involved and failing to put adequate controls in place to ensure that all funds were valued accurately and that all trades were allocated fairly between funds.

Invesco breached Principles 3 and 7 of the FCA’s Principles for Businesses.

Also, IFML failed to comply with investment restrictions set out in Rule 5.2 of the FCA’s Collective Investment Schemes sourcebook. These relate to the standards that asset management firms must comply with when investing investors’ money.

Invesco also used derivatives without adequately disclosing this to investors and failed to invest adequately in the systems and controls around its front office.

As a result Invesco’s investors were exposed to greater levels of risk than expected.

There were losses of £5.3 million (for which the funds were compensated quickly) and a risk that that figure could have been higher.

Copies of the final notice http://www.fca.org.uk/static/documents/final-notices/invesco-asset-management-limited%20.pdf