Natixis Asset Management fined for misleading investors over charges

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Natixis Asset Management says it will appeal a fine from the French regulator for misleading investors over redemption charges.

Autorité des marchés financiers (AMF) has imposed a €35m (£31.3m) fine on the Paris-headquartered asset manager, which is the largest subsidiary of Natixis Global Asset Management with €358.8bn assets under management.

The fine, the largest ever handed out by the enforcement committee, is for a range of formula funds, which did not include the redemption charges levied to investors in their fund prospectuses.

The AMF says the asset manager failed to act in the best interests of investors and that the violations were particularly severe given the large value of assets and the period of time over which the failings occurred, from 2012 to 2015.

However, Natixis AM chief executive Matthieu Duncan says the company “strongly disputes” the decision and will appeal before the French Council of State.

Morningstar research analyst Mara Dobrescu says formula funds, which offer a guarantee on initial capital invested, plus a return determined by an algorithm, are often poorly understood by investors.

“We had generally been critical of fund companies that launched such products massively and opportunistically,” Dobrescu says.

However, Morningstar will not be making any changes to its view of the asset manager or downgrading any of its funds, noting that Natixis AM has shifted its focus away from formula funds and toward “more traditional open-ended products”.