Computershare fined €322,500 for multiple breaches of regulations

Firm which manages share registers for PLCs for breaches of laws covering client assets

 

Computershare, which maintains shareholder registers on behalf of companies, has been fined €322,500 and reprimanded by the Central Bank for several breaches of legislation covering client assets.

The bank said the infringements related to “certainty of ownership” of client assets and access to client assets in the event of Computershare’s insolvency.

The findings were accepted by the firm as part of the settlement agreement with the Central Bank.

The Central Bank’s director of enforcement Derville Rowland said: “For 21 months, between 2011 and 2013, the firm breached key provisions of the Client Asset Requirements (CAR) regarding certainty of ownership of client assets relating to a specific service which it provided.”

“The firm did not arrange for the registration of the registrable client financial instruments in the name of the client or in the name of an eligible nominee; or obtain the required acknowledgement letters regarding those assets.”

The daily average of the aggregate value of client assets affected by the breaches was €4.4 million, the bank said.

In the event of the Computershare’s insolvency, the firm’s non-compliance could have resulted in delay in returning client assets.

“The firm’s breaches occurred despite the Central Bank having made it clear to industry that we see the risk to client assets on an insolvency as including the risk of delay in return of those assets to investors,” the bank said.

The Central Bank said it had “repeatedly” highlighted CAR compliance as a concern and an enforcement priority.

“This case and the sanctions imposed reflect the importance to the Central Bank of compliance with the CAR, particularly the principle of certainty of ownership of client assets,” it added.

Computershare’s Irish arm is authorised by the Central Bank under the Markets in Financial Instruments Directive (MifID) regulations to provide the investment services to companies in relation to the order and receipt of various financial instruments, most obviously shares.

Its core business is as a share registrar for publicly listed clients, which include Vodafone and Diageo.

Computershare was originally established in Australia but now subsidiaries in 20 countries with up to 15,000 employees worldwide.