Mercer Global Investments Management Limited Fined €117,600 for Breaches of UCITS RegulationsNovember 2022
On 14th November 2022, the Central Bank reprimanded and fined Mercer Global Investments Management Limited (‘MGIM’) €117,600 pursuant to its Administrative Sanctions Procedure (‘ASP’) for six breaches of UCITS investment fund regulations (the ‘UCITS Regulations’).
MGIM, as a UCITS Management Company, was responsible under the UCITS Regulations for ensuring that certain information must be included in prospectuses and key investor information documents (‘KIIDs’) for funds it managed, and that this information should have been kept up to date in order to enable investors to make informed decisions about their investments.
The Central Bank found that, for varying periods between 1st July 2011 and 31st December 2018, the prospectuses and KIIDs for five sub-funds failed to disclose that the sub-funds relied upon an index-tracking strategy or provide the details of the index being tracked.
As a result, MGIM’s failure to comply with these requirements may have resulted in investors not being fully informed of the investment strategy of a particular fund or the risks associated with investment in that fund.
In addition, to ensure effective gatekeeping by the Central Bank in the authorisation of funds, the Central Bank reviews prospectuses (including any supplements to those prospectuses) before authorising a fund. The Central Bank noted the effectiveness of its gatekeeper role ultimately relies on accurate and complete information being submitted by firms seeking fund authorisation, as part of the assessment of their applications and in ongoing supervision.
The Central Bank’s investigation found that MGIM failed in its obligations to both investors and to the Central Bank by not including required information regarding index-tracking strategy in the prospectuses and KIIDs of five investment funds managed by MGIM.
Penalty Decision Factors
In deciding the appropriate penalty to impose, the Central Bank considered the ASP Sanctions Guidance issued in November 2019 and highlighted the following particular factors in this case as: