Invesco Asset Management and Invesco Fund Managers have been fined for breaching collective investment rules and exposing investors to greater levels of risk than they had been led to expect.
The Financial Conduct Authority (FCA) slapped the UK’s largest asset manager with a fine of more than £18.6 million (€22.6 million) for its failings.
It found that FCA rules designed to limit the risks to investors were breached on 33 occasions in 15 branded funds, which represented more than 70% of the assets under managements.
The extent of the resulting losses amounted to £5 million. Prompt compensation was paid to the funds, the regulator noted.
Invesco Perpetual did not comply with investment limits designed to protect customers between May 2008 and November 2012.
The regulator also says that Invesco Perpetual did not communicate clearly or fairly with its investors – that it did not disclose the use of derivatives in the relevant simplified prospectuses and incorrectly described the impact of using derivatives in the key investor information documents produced in 2012.
Trades were not recorded on time, meaning the funds could have been wrongly priced, the regulator says, adding that Invesco Perpetual did not adequately monitor whether trades were allocated fairly between funds, which created a risk that some funds may have been disadvantaged.
“In this case, investors of all sizes trusted Invesco Perpetual to manage their money,” Tracey McDermott, FCA director of enforcement and financial crime, says.
“They signed up for a certain level of risk but we found Invesco Perpetual’s actions were at odds with investors’ reasonable expectations.”
Invesco Perpetual agreed to settle at an early stage and has qualified for a 30% discount on the fine.
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