LGT's Irish arm fined €95k for failing to maintain enough regulatory capital
The Central Bank has fined the Irish arm of Swiss alternative investment manager LGT Capital Partners €95,000 for failing to maintain a sufficient level of regulatory capital.
The Central Bank said that in January last year, it noted in a periodic regulatory return from LGT Capital Partners (Ireland) that the firm had a deficit of €132,000 in its regulatory capital. That regulatory capital specifies the minimum level of specific types of capital that must be available to absorb losses in the event a firm becomes insolvent.
The Central Bank said it requested further information from the LGT Capital Partners (Ireland) which showed that the firm was undercapitalised for a total of 50 days between December 31, 2012, and February 24, 2013.
The amount of the shortfall varied from €3,000 to €521,000, according to the Central Bank. It said that the breach occurred because of an increase in the required amount of regulatory capital due to an increase in the firm's debtors at the end of December 2012.
The Central Bank said that once the breaches were discovered, the firm took "prompt corrective action" to address and rectify the issues. It said the firm also cooperated with the Central Bank during the investigation.
The Central Bank found that LGT Capital Partners (Ireland) had failed to ensure it had in place and used "sound administrative and accounting procedures and internal control mechanisms to enable it to monitor and recognise the risk that its increasing debtor balance could cause its level of own funds to fall below the required amount due to its increased credit risk capital requirement".
The Central Bank's director of enforcement, Derville Rowland, said that firms must ensure that their systems and controls are adequate to ensure compliance with regulatory capital requirements.
"Where the Central Bank finds evidence of failures in this area, it will continue to use its range of regulatory tools, including enforcement," she said.
Levying the fine, the Central Bank said it now considers the matter closed.