LGT Capital Partners Limited

Background In January 2013, on receipt of a periodic regulatory return from the Firm, the Central Bank noted that the Firm had a deficit of €132,000 in its regulatory capital (Regulatory Capital specifies the minimum level of specific types of capital that must be available to absorb losses in the event of an insolvency of a firm). The Central Bank requested further information from the Firm which showed that the Firm was undercapitalised for a total of 50 days between 31 December 2012 and 24 February 2013. The amount of the shortfall varied from €3,000 to €521,000. The breach occurred due to an increase in the required amount of regulatory capital caused by an increase in the Firm’s debtors at the end of December 2012. Penalty decision factors In deciding the appropriate penalty to impose, the Central Bank has taken the following into account:  the seriousness with which the Central Bank views any contraventions of the Capital Adequacy Regulations and the failure to have in place proper internal control mechanisms to enable firms to recognise the risk to capital from certain events;  that once the breaches were discovered the Firm took prompt corrective action to address and rectify the issues which led to the contraventions;  the cooperation of the Firm during the Central Bank’s investigation and in settling at an early stage in the administrative sanctions procedure. 3 The Central Bank confirms that the matter is now closed.