Appian Asset Management Limited

the Central Bank has imposed a sanction on a firm where there has been a loss of client funds from cyber-fraud as a direct result of the firm’s significant regulatory breaches and failures. Appian’s failures in this case demonstrated serious deficiencies in its governance arrangements, risk management, compliance oversight, and systems of internal control. These failings, combined with a culture in which clients’ instructions were given primacy over security and regulatory concerns, rendered the Firm exposed to the cyber-fraud that occurred. It placed client assets at heightened risk and that risk crystallised. The Central Bank views such fundamental failings as completely unacceptable. The Central Bank expects the Board and senior management of all firms permitted to hold client assets to take active measures to ensure they hold such assets safely and securely. It is imperative that the people who run firms are vigilant as to their vulnerabilities around cybercrime and should ensure that all appropriate regulatory safeguards are in place to protect their clients’ assets. The level of fine reflects the seriousness of Appian’s governance, operational, compliance and risk failures. It also reflects the importance the Central Bank places on investor protection. Regulatory failures of this nature, especially where the failures result in financial losses to clients, will result in vigorous investigation and action by the Central Bank.” BACKGROUND Appian is authorised as an Alternative Investment Fund Manager (“AIFM”) under the European Union (Alternative Investment Fund Managers) Regulations 2013 (the “AIFM Regulations 2013”) on 6 January 2014.