Breaches cost fund managers pounds 47,000

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The Independent Online
Old Mutual Fund Managers, the unit trust management arm of the UK insurance company, was yesterday fined pounds 30,000 by Imro, the fund managers' watchdog, for a series of rule breaches.

The company was also ordered to pay pounds 17,000 for offences that included failing to invest cheques paid to them by their clients quickly enough.

This meant that up to 400 clients who invested with Old Mutual risked financial loss because they were not always able to obtain the best prices for the unit trusts they were buying.

The Imro investigation, carried out in late 1993, also showed that the company, owned by one of South Africa's largest insurance groups, also had inadequate compliance procedures in place. The company's unit trust side manages some pounds 600m of funds in the UK.

Imro said yesterday: "During 1993, Old Mutual Fund Managers did not have the procedures and arrangements in place to ensure that its staff could meet their relevant activities under the regulatory system."

Alan Parsons, managing director at Old Mutual, said: "We have compensated any client who might have been affected at a total cost of pounds 7,500, about pounds 20 per investor.

"We hope that there will be no repeat of what took place two years ago."