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Sunday 22 October 2017

Central Bank fines firm led by Enterprise Ireland chair

Central Bank headquarters (Stock picture)
Central Bank headquarters (Stock picture)
Charlie Weston

Charlie Weston

An investment fund headed up by one of the country's highest profile accountants has been fined by the Central Bank over how it treated clients.

Kinsale Capital Management is chaired by Terence O'Rourke, who is chairman of Enterprise Ireland.

The low-profile firm was fined €275,000 for breaching rules on how it dealt with clients.

This is set to be an embarrassment for Mr O'Rourke, who is former managing partner of KPMG, and a board member of The Irish Times Limited. He is also on a string of other high-profile boards.

Mr O'Rourke is also board member, fellow and former president of the Chartered Accountants Regulatory Board.

He was appointed as a director to Kinsale Capital Management last September, with the breaches happening before his appointment.

The Central Bank said that after an on-site visit to Dublin-based Kinsale Capital Management it found the firm was providing investment advice to three retail clients in breach of its authorisation.

It is only supposed to advise professional investors.

The website for the firm describes it as a "global value equity fund" and mentions it was nominated for the Global Euro Hedge Awards in 2012, 2013, 2014 and 2015.

The firm made profits of €1.4m in 2015, Companies Office records show.

A statement from the Central Bank said it fined Kinsale Capital Management Limited €275,000 and reprimanded it for breaches of the European Communities (Markets in Financial Instruments) Regulations 2007 (MiFID).

The breaches in this case relate to:

÷ The firm's failure to carry out adequate assessments of certain clients who elected to be treated as professional clients between June 7, 2011 and July 31, 2015;

÷ The firm's failure to implement appropriate policies and procedures for client categorisation between April 6, 2010 and March 2015; and

÷ The firm providing investment services to three retail clients in breach of the terms of its authorisation between December 14, 2011 and July 31, 2015.

In a statement, Kinsale Capital Management said it fully accepts the Central Bank findings relating to its mis-categorisation of a small number of retail clients who elected to be treated as professional clients.

The firm took steps to address the breaches identified and to become fully compliant, it said. It is understood no clients lost any money.

Irish Independent

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