Celina Fondförvaltning receives warning and administrative fine

Summary

Celina Fondförvaltning AB (Celina or the company) has authorisation to conduct fund operations and discretionary portfolio management of financial instruments pursuant to the Swedish UCITS Act (2004:46). Celina also has authorisation to manage alternative investment funds pursuant to the Alternative Investment Fund Managers Act (2013:561).

Finansinspektionen has investigated how Celina, as part of its fund operations, has managed conflicts of interest in, for example, a number of transactions linked to undertakings included in the constellation of firms to which the company belongs (Athanase Group). The authority also investigated how the company complied with certain central rules of conduct that require the operations to be conducted honestly, fairly and professionally and that a fund management company ensure a high level of diligence in the selection of investments.

For example, Celina, on the behalf of funds, has made a number of investments linked to other undertakings in the Athanase Group at the same time as two of the ultimate owners in the Athanase Group held active roles in Celina as the chair of the Board of Directors and manager of the relevant funds.

The investigation shows that there have been major deficiencies in Celina's management of conflicts of interest. The company's procedures were deficient, and it had not otherwise taken all reasonable measures to prevent unit holders' interests from being impacted negatively by the conflicts of interest. Neither has the company met the requirement to act exclusively in the common interest of the unit holders when managing a UCITS. Furthermore, Celina has been deficient in its policies for managing conflicts of interest and violated its obligation to keep a record of activities that give rise to conflicts of interest. The company has thus also not met the requirement of having an organisation that reduces the risk of conflicts of interest that can have a negative impact on the interests of unit holders. Finally, when selecting investments, Celina has not acted with a required high level of diligence.

The provisions Celina violated are fundamental for maintaining investor protection and confidence in the market. They therefore belong to the most central provisions that a fund management company is obligated to follow.

The violations are serious. Finansinspektionen makes the assessment that there are grounds to intervene against Celina and is issuing the company a warning with an administrative fine of SEK 10 million.