H20 agreed to voluntarily apply to cancel its market permission by year-end.
The FCA’s penalty relates to the company's actions over nearly four years.
H2O Asset
Management has agreed to pay €250 million to investors and exit the UK market
following a damning investigation by the UK's Financial Conduct Authority
(FCA). The regulator uncovered significant failures in the firm's investment
practices, governance, and communications with authorities between April 2015
and November 2019.
H2O's €250 Million
Settlement Caps Years-Long Regulatory Saga
The FCA's
investigation revealed that H2O failed to conduct proper due diligence on
high-risk, illiquid investments related to Lars Windhorst's Tennor Group of
companies and other entities he introduced. These investments, totaling
approximately €1.643 billion by August 2020, proved difficult to sell, leading
to the freezing of investor funds in 2020.
“H2O's
job was to manage its funds properly and protect investors,” Steve Smart, joint
Executive Director of Enforcement and Market Oversight at the FCA, stated. “It
failed to do this and, to make matters worse, it repeatedly provided misleading
information to the FCA.”
The
regulator found that H2O breached multiple rules of the FCA's Principles for
Businesses, including failing to conduct business with due skill, care, and
diligence, inadequate organization and control of its affairs, and failing to
be open and cooperative with the regulator.
In a
particularly serious breach, H2O provided false and misleading statements and
documentation to the regulator, including fabricated records and meeting
minutes. The FCA discovered that H2O had created multiple records of governance
and oversight committee meetings that had never taken place, and provided
numerous misleading due diligence reports that were prepared retrospectively
rather than at the time of investment decisions.
The Fine Could Be Higher
While the
FCA would typically impose a substantial fine for such serious breaches, it has
instead agreed to H2O's €250 million payment to affected investors. A
significant portion of this sum comes from a voluntary contribution by the H2O
Group. Additionally, H2O has waived its rights to fees and investments totaling
€320 million.
“Through
this settlement the FCA has secured money for affected investors and agreement
that H2O will stop operating regulated business in the UK,” Smart added.
As part of
the settlement, H2O will apply to cancel its UK authorization by December 31,
2024, effectively ceasing its regulated business operations in the country. The
firm has also agreed to implement significant enhancements to its governance,
systems, and controls to prevent similar misconduct in the future.
The French
financial services regulator, Autorité des marchés financiers (AMF), which
oversees the collective investments managed by H2O on a cross-border basis
under the UCITS Directive, had previously issued a penalty to H2O, which is
currently under appeal.
Investors
in H2O's funds, particularly those with assets in the side-pocketed funds
created in 2020 to hold the illiquid investments, will be watching closely to
see how quickly they can recover their trapped funds. The €250 million payment,
along with any future recoveries, offers some hope of recompense for affected
investors.
The 2nd Highest
Penalty Imposed by the FCA
It's worth
noting that the penalty imposed on H2O is one of the highest in the history of
the regulator. Until now, the record fine was £284 million, which Barclays
received in 2015. As for the highest penalties imposed this year, both occurred
in May.
Citigroup had to pay £61.6 million for a trading mistake that cost much more,
amounting to £1.4 million. At the same time, HSBC received a £6.28 million penalty for failures in
customer treatment. From June 2017 to October 2018, HSBC's actions resulted in
insufficient consideration of customers' circumstances.
H2O Asset
Management has agreed to pay €250 million to investors and exit the UK market
following a damning investigation by the UK's Financial Conduct Authority
(FCA). The regulator uncovered significant failures in the firm's investment
practices, governance, and communications with authorities between April 2015
and November 2019.
H2O's €250 Million
Settlement Caps Years-Long Regulatory Saga
The FCA's
investigation revealed that H2O failed to conduct proper due diligence on
high-risk, illiquid investments related to Lars Windhorst's Tennor Group of
companies and other entities he introduced. These investments, totaling
approximately €1.643 billion by August 2020, proved difficult to sell, leading
to the freezing of investor funds in 2020.
“H2O's
job was to manage its funds properly and protect investors,” Steve Smart, joint
Executive Director of Enforcement and Market Oversight at the FCA, stated. “It
failed to do this and, to make matters worse, it repeatedly provided misleading
information to the FCA.”
The
regulator found that H2O breached multiple rules of the FCA's Principles for
Businesses, including failing to conduct business with due skill, care, and
diligence, inadequate organization and control of its affairs, and failing to
be open and cooperative with the regulator.
In a
particularly serious breach, H2O provided false and misleading statements and
documentation to the regulator, including fabricated records and meeting
minutes. The FCA discovered that H2O had created multiple records of governance
and oversight committee meetings that had never taken place, and provided
numerous misleading due diligence reports that were prepared retrospectively
rather than at the time of investment decisions.
The Fine Could Be Higher
While the
FCA would typically impose a substantial fine for such serious breaches, it has
instead agreed to H2O's €250 million payment to affected investors. A
significant portion of this sum comes from a voluntary contribution by the H2O
Group. Additionally, H2O has waived its rights to fees and investments totaling
€320 million.
“Through
this settlement the FCA has secured money for affected investors and agreement
that H2O will stop operating regulated business in the UK,” Smart added.
As part of
the settlement, H2O will apply to cancel its UK authorization by December 31,
2024, effectively ceasing its regulated business operations in the country. The
firm has also agreed to implement significant enhancements to its governance,
systems, and controls to prevent similar misconduct in the future.
The French
financial services regulator, Autorité des marchés financiers (AMF), which
oversees the collective investments managed by H2O on a cross-border basis
under the UCITS Directive, had previously issued a penalty to H2O, which is
currently under appeal.
Investors
in H2O's funds, particularly those with assets in the side-pocketed funds
created in 2020 to hold the illiquid investments, will be watching closely to
see how quickly they can recover their trapped funds. The €250 million payment,
along with any future recoveries, offers some hope of recompense for affected
investors.
The 2nd Highest
Penalty Imposed by the FCA
It's worth
noting that the penalty imposed on H2O is one of the highest in the history of
the regulator. Until now, the record fine was £284 million, which Barclays
received in 2015. As for the highest penalties imposed this year, both occurred
in May.
Citigroup had to pay £61.6 million for a trading mistake that cost much more,
amounting to £1.4 million. At the same time, HSBC received a £6.28 million penalty for failures in
customer treatment. From June 2017 to October 2018, HSBC's actions resulted in
insufficient consideration of customers' circumstances.
Damian's adventure with financial markets began at the Cracow University of Economics, where he obtained his MA in finance and accounting. Starting from the retail trader perspective, he collaborated with brokerage houses and financial portals in Poland as an independent editor and content manager. His adventure with Finance Magnates began in 2016, where he is working as a business intelligence analyst.
Hantec Markets' UK Unit Turns a Loss in 2023 due to "Additional IT Expenditure"
Transformation in the APAC Trading Landscape and Beyond | FMPS:24
Transformation in the APAC Trading Landscape and Beyond | FMPS:24
As the financial services industry experiences rapid and transformative changes, leading fintech experts and policymakers come together to discuss the present and future of retail trading and the evolving regulatory landscape. Join this insightful session for a forward-looking perspective on the trends, innovations, and trader needs that are shaping the future of offerings on a global scale.
Speakers:
Eric Blewitt, CEO, Investment Trends
Rhys Bollen, Senior Executive Leader, Digital Assets, Australian Securities and Investments Commission (ASIC)
Michael Bogoevski, Head of Institutional Sales, CMC Connect
Karin Setchell, General Manager, Product & Investing Solutions, CommSec
#fmps #fmps24 #fmevents #RetailTrading #FintechInnovation #FinancialRegulation #DigitalAssets #GlobalFinance
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
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▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage.
Subscribe to our YouTube channel for more!
As the financial services industry experiences rapid and transformative changes, leading fintech experts and policymakers come together to discuss the present and future of retail trading and the evolving regulatory landscape. Join this insightful session for a forward-looking perspective on the trends, innovations, and trader needs that are shaping the future of offerings on a global scale.
Speakers:
Eric Blewitt, CEO, Investment Trends
Rhys Bollen, Senior Executive Leader, Digital Assets, Australian Securities and Investments Commission (ASIC)
Michael Bogoevski, Head of Institutional Sales, CMC Connect
Karin Setchell, General Manager, Product & Investing Solutions, CommSec
#fmps #fmps24 #fmevents #RetailTrading #FintechInnovation #FinancialRegulation #DigitalAssets #GlobalFinance
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage.
Subscribe to our YouTube channel for more!
Executive Interviews with Joe Li & Simon Naish | ATFX | FMPS:24
Executive Interviews with Joe Li & Simon Naish | ATFX | FMPS:24
In this Finance Magnates Executive Interview, Joe Li, Chairman at ATFX and Simon Naish, Country Head of Australia at ATFX Connect, discuss ATFX’s strategic growth in the APAC region, particularly focusing on their institutional arm, ATFX Connect. They highlight the importance of Australia as a strategic hub, the challenges of operating in a highly competitive and regulated market, and their plans for regional expansion across APAC. The conversation touches on the integration of advanced technology and multi-asset offerings, the significance of optimal execution tools, and the importance of tailoring solutions to meet the sophisticated demands of institutional clients. They also emphasize their strong regulatory compliance and their commitment to enhancing client experience through innovative tools and infrastructure.
#fmps #fmps24 #fmevents #ATFXConnect #APACFinance #InstitutionalTrading #FinancialTechnology #MarketExpansion
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage.
Subscribe to our YouTube channel for more!
In this Finance Magnates Executive Interview, Joe Li, Chairman at ATFX and Simon Naish, Country Head of Australia at ATFX Connect, discuss ATFX’s strategic growth in the APAC region, particularly focusing on their institutional arm, ATFX Connect. They highlight the importance of Australia as a strategic hub, the challenges of operating in a highly competitive and regulated market, and their plans for regional expansion across APAC. The conversation touches on the integration of advanced technology and multi-asset offerings, the significance of optimal execution tools, and the importance of tailoring solutions to meet the sophisticated demands of institutional clients. They also emphasize their strong regulatory compliance and their commitment to enhancing client experience through innovative tools and infrastructure.
#fmps #fmps24 #fmevents #ATFXConnect #APACFinance #InstitutionalTrading #FinancialTechnology #MarketExpansion
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage.
Subscribe to our YouTube channel for more!
Ready to Scale? Regtech in Australia, A Global View | FMPS:24
Ready to Scale? Regtech in Australia, A Global View | FMPS:24
In the effort to elevate Australian fintech on the global stage, RegTech presents a unique and compelling case. Despite the increasing demand for robust compliance solutions, Australia's RegTech sector—ranked third-largest globally—remains underfunded. Join this insightful fireside chat to explore the future of Australia’s RegTech hub and its global potential.
Key discussion points include uncovering the hidden opportunities in RegTech that VCs are overlooking, the necessary steps for increased governmental support, the readiness of the local ecosystem to collaborate across global regulatory regimes, and lessons learned from other leading fintech hubs around the world.
Speakers:
Dickie Currer, National Lead, Tech Australia Advocates
Deborah Young, CEO, The RegTech Association
#fmps #fmps24 #fmevents #RegTech #Fintech #AustralianFintech #GlobalCompliance #TechInnovation
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage.
Subscribe to our YouTube channel for more!
In the effort to elevate Australian fintech on the global stage, RegTech presents a unique and compelling case. Despite the increasing demand for robust compliance solutions, Australia's RegTech sector—ranked third-largest globally—remains underfunded. Join this insightful fireside chat to explore the future of Australia’s RegTech hub and its global potential.
Key discussion points include uncovering the hidden opportunities in RegTech that VCs are overlooking, the necessary steps for increased governmental support, the readiness of the local ecosystem to collaborate across global regulatory regimes, and lessons learned from other leading fintech hubs around the world.
Speakers:
Dickie Currer, National Lead, Tech Australia Advocates
Deborah Young, CEO, The RegTech Association
#fmps #fmps24 #fmevents #RegTech #Fintech #AustralianFintech #GlobalCompliance #TechInnovation
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage.
Subscribe to our YouTube channel for more!
Resilience in Trading: From Third Class To World Class | FMPS:24
Resilience in Trading: From Third Class To World Class | FMPS:24
Join Mario Singh, Founder and Chairman of Fullerton Markets, as he shares his life story, highlighting the traits that were required starting without financial knowledge to become a financial and trading expert recognised by world-renowned media like CNBC & Bloomberg.
#fmps #fmps24 #fmevents #trading #onlinetrading #tradingexpert #tradingjourney
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage.
Subscribe to our YouTube channel for more!
Join Mario Singh, Founder and Chairman of Fullerton Markets, as he shares his life story, highlighting the traits that were required starting without financial knowledge to become a financial and trading expert recognised by world-renowned media like CNBC & Bloomberg.
#fmps #fmps24 #fmevents #trading #onlinetrading #tradingexpert #tradingjourney
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage.
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IBs and Brokers: The Good, The Bad, The Ugly | FMPS:24
IBs and Brokers: The Good, The Bad, The Ugly | FMPS:24
For most brokers, IBs and trading educators are invaluable partners, driving highly targeted traffic from key regions. However, without proper management, these relationships can quickly turn sour. In this session, gain an insider’s perspective on the types of licenses IBs need in APAC, the crucial details in IB agreements that both parties must scrutinize, common disputes between IBs and brokers and effective resolutions, and the pros and cons of transitioning from IB to broker.
Speakers:
Melody Gao, Senior Lawyer, Sophie Grace
James Perry-Keene, Head of Strategic Partnerships, Pepperstone
Christopher Balanzategui, CEO, N3tworx
#fmps #fmps24 #fmevents #IBAgreements #BrokerPartnerships #TradingIndustry #APACFinance #FinancialRegulation
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage.
Subscribe to our YouTube channel for more!
For most brokers, IBs and trading educators are invaluable partners, driving highly targeted traffic from key regions. However, without proper management, these relationships can quickly turn sour. In this session, gain an insider’s perspective on the types of licenses IBs need in APAC, the crucial details in IB agreements that both parties must scrutinize, common disputes between IBs and brokers and effective resolutions, and the pros and cons of transitioning from IB to broker.
Speakers:
Melody Gao, Senior Lawyer, Sophie Grace
James Perry-Keene, Head of Strategic Partnerships, Pepperstone
Christopher Balanzategui, CEO, N3tworx
#fmps #fmps24 #fmevents #IBAgreements #BrokerPartnerships #TradingIndustry #APACFinance #FinancialRegulation
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
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