• IRE CB reprimanded and fined Sarasin Funds Management (Ireland) Limited €385,000 for four admitted breaches of investment funds regulations from May 25-March 2, 2018.
• Appropriate fine of €550,000 reduced by 30% as per the settlement discount scheme.

Background

• Authorized UCITS fund management firm, managed by non-executive director board.
• Some functions delegated to external providers, with ongoing monitoring; investment management services to investment manager and depository function to a depository.
• IRE CB investigation follows August 2017 disclosure by the depository, in accordance with reporting obligation, regarding advertent breach of investment restrictions.

Findings

• Advertent investment restriction breaches by the appointed investment manager conducting a merger of two funds managed by the firm, while acting as a delegate.
• They also deliberately breached of obligatory investment concentration restrictions.
• Sarasin breached UCITS regulations/merging fund prospectus investment restrictions.
• Ineffective delegate reporting/supervision; failed exception and escalation reporting.
• Serious weaknesses in supervision and monitoring of delegation model and merger.

Mitigating Factors

• No previous adverse attention of supervisors or subject to other enforcement action.
• Provided the expected level of co-operation with IRE CB during the investigation.