The U.K. Financial Conduct Authority fined twounits of AvivaPlc £8.2 million for failing to ensure adequate oversight ofoutsourced providers in relation to the protection of client assets.
The regulator said Aviva Pension Trustees UKLtd. and Aviva Wrap UK Ltd. breachedClient Assets Sourcebook rules, which are put in place to protect client moneyand custody assets in the event that a firm becomes insolvent and to ensurethat money and assets can be returned to clients as quickly as possible.
The FCA also found deficiencies with thefirms' internal reconciliation process, which resulted in under- andoversegregation of client money. As much as £74.4 million was undersegregatedduring the period from Feb. 10, 2014, to Feb. 9, 2015.
No client money was lost as a result of thebreach, but the regulator stressed that customers could have suffered lossesbecause of noncompliance with the rules.
Aviva received a 30% discount on what would havebeen an £11.8 million fine because the company agreed to settle at an earlystage, the FCA noted.