FSA has fined BlackRock Investment Management (UK) Limited £9,533,100 for breaches of client money requirements. It found the firm:
- did not put in place trust letters for certain money market deposits; and
- failed to take reasonable care to organise and control its affairs responsibly in relation to the identification and protection of client money.
FSA found that, for a period of around 3.5 years, the firm failed to ensure it received from banks holding money market deposits for its clients the letters that CASS rules require for the purpose of acknowledging the money is held on trust and cannot be used by the bank in the event of the firm’s insolvency. The errors occurred because of systems changes and put£1.36 billion of client money at risk each day. Tracey McDermott said: “This is not the first time we have seen the impact on client money overlooked as part of a reorganisation. The fine imposed today should remind all firms of the critical importance we place on ensuring proper protection of client money at all times.” (Source: FSA Fines Investment Manager for Client Money Breaches)