Aviva Investors' settlement with the FCA
Aviva plc today announces that its asset management business, Aviva Investors, has reached an early agreement with the Financial Conduct Authority regarding historic breaches of FCA regulatory requirements concerning Aviva Investors’ dealing controls prior to 2013.
14 FEB 2015
Aviva Investors has cooperated fully with the FCA during its investigation, unreservedly accepts the FCA’s decision, and has agreed to pay a fine of £17.6 million.
In determining the fine, the FCA has taken into account:
Aviva Investors promptly notified the FCA of the breaches; from the point it identified and self-reported the breaches, Aviva Investors and its senior management team engaged promptly and fully with the investigation; Aviva Investors has made significant improvements to its governance and control framework; Aviva Investors has not been the subject of previous disciplinary action; and that Aviva Investors’ cooperation was exceptional throughout the investigation.
Euan Munro, Chief Executive Officer of Aviva Investors, said:
“We fully accept the conclusions of this investigation. We have fixed the issues, improved our systems and controls, and ensured no customers have been disadvantaged. We have also made substantial changes to the management team which is leading the turnaround of Aviva Investors.
“We have a clear focus on simple and specific investment outcomes for clients and we are delivering strong levels of investment performance within a robust control environment.”
Nigel Prideaux +44 (0)20 7662 0215
Sarah Swailes +44 (0)20 7662 6700
Analysts and investors:
Colin Simpson +44 (0)20 7662 8115
David Elliot +44 (0)20 7662 8048
Notes to editors:
- Following Mark Wilson’s appointment in 2013, he initiated a strategic review of Aviva Investors, giving Jason Windsor executive responsibility for the business with a focus on improving risk management and control.
- We brought onto the Aviva Investors board of directors knowledgeable independent non-executive directors (INEDs) from within the industry.
- With input from the new INEDs, the Aviva Investors board has been focused on resolving control and audit issues in a timely, efficient and thorough manner.
- We have improved the quality of information available to the Aviva Investors board concerning risk and control matters.
- Appointment of new CEO, Euan Munro; new Chief Operating Officer, Susan Ebenston; new Chief Risk Officer, Steve Farrall; and a new Head of Compliance Robin Mitchell in Aviva Investors.
- We have implemented the Aladdin system – one of the most widely used and longest established pieces of risk management technology in the industry. It allows our investment platforms to operate on the same model globally. We have introduced more stringent segregation of roles to ensure conflicts are avoided.
- In March 2014, Aviva reported in its full year results that it had found evidence of improper allocation of trades in fixed income securities in Aviva Investors by two former employees. These two individuals are no longer with the business. We confirmed at the time that there was a total adverse impact on 2013 operating profit from this activity of £132 million.
- A thorough and extensive review of internal control processes relating to dealing policy was carried out by PwC. Measures to improve controls, and address the issues raised by the FCA, have been implemented. Aviva promptly compensated funds that may have been adversely affected ensuring that they were not negatively impacted. As a result customers have not been disadvantaged by this and customers do not need to take any action.
Aviva Investors and Aviva:
- Aviva Investors is the global asset management business of Aviva plc. The business delivers investment management solutions, services and client-driven performance to clients worldwide. Aviva Investors operates in 15 countries in Asia Pacific, Europe, North America and the United Kingdom with assets under management of £240 billion as at 30 September 2014.
- Aviva provides 31 million customers with insurance, savings and investment products.
- We are one of the UK’s leading insurers and one of Europe’s leading providers of life and general insurance.
- We combine strong life insurance, general insurance and asset management businesses under one powerful brand.
- We are committed to serving our customers well in order to build a stronger, sustainable business, which makes a positive contribution to society, and for which our people are proud to work.
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