Natixis Investment Managers International was fined €2 million ($2.5 million) for breaches relating to disclosure of profits from securities financing transactions and the management of conflicts of interest related to these transactions, a French regulatory authority said Sept. 26.
Natixis Asset Management Finance, depositary credit institution, which acted as intermediary in the transactions, was also fined €1 million, for failing to comply with the obligation to act honestly on behalf of Natixis' investors, Autorite des Marches Financiers said.
Natixis used securities lending or repurchase agreements to optimize portfolios of the firm's clients, acting as both lender and borrower of the securities on loan, and producing income worth €24.7 million from cash collateral.
The regulator found, however, that Natixis Investment Managers International had provided incorrect and imprecise information to investors regarding profits from these transactions and failed to fulfill its obligation to manage conflicts of interest.
Also, Natixis Asset Management Finance was found by AMF in breach of the obligation to act in the interest of the investors, the failure to manage the conflicts of interest generated by this payment and the failure to provide information to the investors in this respect.
“This is a technical and complex issue,” Natixis said in an emailed statement. “We do not agree with the enforcement committee’s analysis and we are considering our next course of action.”
Natixis can appeal the decision.
