This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here.
X
MM+301014+small

Santander fined £1.5m over structured product marketing

  • Print
  • Comments (6)

The FSA has fined Santander £1.5m for failing to confirm the circumstances under which its structured products would be covered by the Financial Services Compensation Scheme.

Between the end of 2008 and January 2010 Santander sold approximately £2.7bn of structured products. In June 2009 Santander concluded there would be limited circumstances when its guaranteed capital plus product and its guaranteed growth plan would be covered by the FSCS.

New customers were not informed of the limitation in FSCS cover until January 2010. A total of £1.2bn of structured product sales were carried out after June 2009.

The FSA says Santander acknowledges it could have changed its product literature and training materials earlier to reflect the FSCS position accurately.

FSA acting director of enforcement and financial crime Tracey McDermott says: “When firms provide customers with literature about products, the information has to be correct and unambiguous. After all it is there to help people make informed decisions about whether to invest. The extent of FSCS cover is important to customers, and firms must be clear about this in their Key Facts documents.

“Considering that sales of these products took place between 2008 and 2009, a time of financial uncertainty, Santander should have moved more quickly to confirm under which circumstances FSCS cover would be available.”

The regulator has not found that the product sales were unsuitable.

Santander wrote to investors in March saying they would not be covered by the FSCS. At the time Santander said it did not know whether FSCS cover applied to the products or not, so wrote to investors as a precaution to say cover would not apply.

  • Print
  • Comments (6)

Daily Email Updates
If you enjoyed this article, sign up to receive the latest news and analysis from Money Marketing.

The Money Marketing CPD Centre
Build your annual CPD - you can log and plan your CPD hours for free with The Money Marketing CPD Centre.

Taxbriefs Advantage
Advantage is a digital reference source giving unbiased, independent, answers to your technical queries. Subscribe to Taxbriefs Advantage.

Readers' comments (6)

  • Makes Transact's £3m fine look OTT

    Unsuitable or offensive? Report this comment

  • More to come I suspect... Many of these so called "guaranteed" or "100% principal protected" structured products proved to be the converse in reality...toxic to the investor - and with key facts often neglected from the term sheets or offering documents...

    Unsuitable or offensive? Report this comment

  • The fine isn't a judgement on product, it's about marketing information. The FSA also makes it clear that the sales process was not in question either.

    Unsuitable or offensive? Report this comment

  • Another 'mis-selling' fiasco. I used to work to Santander and these things were trumpted as the answer to everything. Glad the truth is coming out finally.

    Unsuitable or offensive? Report this comment

  • what i don’t understand that the underlying products structure was probably reassured to another abbey national company (as a lot of other scarps offerings had the choice between a few of these reassures) as is basis i.e. the counterparty risk element to the potential failure.

    Why wouldn't they know if they had protection from the fscs? There were a lot of good product out there and the ones that didn’t seem to sell were the ones with all of these warning up front on the product literature. I was there, I compared the differences and to be honest the banks that were offering these products as opposed to the insurance companies were getting away with murder with none of the FSCS warnings or warnings that there was a bigger risk over any protected elements if the counterparty reassuring the deal collapsed.

    Unsuitable or offensive? Report this comment

  • appologies for poor spelling......poor typing probably to blame

    Unsuitable or offensive? Report this comment

Have your sayEdit my profile/screen name

You must sign in to make a comment

Fund Data

Editor's Pick



Poll

Should Sesame unwind the 'pay to play' deals it set up as part of its restricted advice panel?

Job of the week

Latest jobs

View all jobs

Most recent comments

View more comments