On January 20, the UK Financial Services Authority (FSA) announced that it had fined Standard Life Assurance Limited (SLAL) £2.45 million (approximately $3.9 million) for systems and control failures which had led to SLAL circulating misleading marketing material about one of its funds.
The FSA ruled that SLAL had breached two of the FSA’s Principles for Businesses—Principle 3 (management and control) and Principle 7 (communications with clients). The FSA concluded that:
- marketing material regarding the fund was not “clear, fair and not misleading”—it referred to the fund being wholly invested in cash despite the majority of the fund’s investments being in floating rate notes; and
- there were no adequate systems and controls in place at SLAL to ensure that marketing material that was issued accurately reflected relevant investment strategies, and as a result, in this case customers were given misleading information.
The fine was discounted from £3.5 million (approximately $5.6 million), since SLAL had cooperated fully with the FSA and had agreed to settle at an early stage in the investigation. Margaret Cole, the FSA Director of Enforcement and Financial Crime, said, “The FSA takes the issue of misleading financial promotions very seriously and the fine announced today demonstrates our commitment to the principle of credible deterrence. It is critical that consumers are given an accurate understanding of the nature of investment products and the risks involved.”
To read the decision in full, click here.