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RBC Investor Services Bank France hit with €500,000 fine

FineRBC Investor Services Bank France (ISBF) SA has been hit with a fine of €500,000 and a warning for failing to exercise proper depositary control and irregular and deficient monitoring of certain cash flows. 

The Enforcement Committee of France's financial regulator, the AMF, issued the fine and warning to the credit institute, which was decided on July 20, 2022. 

RBC ISBF, at the time of the facts, engaged in the activity of Ucits and alternative investment fund (AIF) depositary bank for investment funds and institutional clients. It also monitored whether Ucits complied with the applicable investment and asset composition ratios, intervening if these ratios were exceeded. 

After a sample of ratio overruns was analysed by inspectors, RBC ISBF was allegedly responsible for 28 anomalies in its intervention procedure. Of these anomalies, 25 were confirmed by the Enforcement Committee. The Enforcement Committee also identified several anomalies stemming from the same facts.

However, allegations that no unique identifier was assigned to each of the ratio overruns identified were dismissed by the Committee. 

Monitoring cash flows into and out of the funds for which it was the depository also fell into the remit of RBC ISBF. Here, the credit institute was responsible for identifying large flows, especially those inconsistent with the AIF’s operations, ensuring that instructions given to these flows were not contrary to legal or regulatory provisions, rules and constituent documents or the prospects of the AIF. 

A total of 14 questionable flows were identified by inspectors examining several thousand flows over 45 months pertaining to seven AIFs for which RBC ISBF was the depositary. 

Of these 14 flows, the Committee concluded that RBS ISBF failed to sufficiently collect precise and convincing documentation to comply with the necessary obligations. 

Five of these flaws relating to current account advances paid by one of the AIFs to a beneficiary company found that RBC ISBF failed to ensure the fund held at least 5% of the company capital. 

An appeal may be lodged by RBC ISBF against the decision. 

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