The Central Bank has fined BCP Asset Management Designated Activity Company a total of €210,000 for breaches of the conduct of business rules.
The Central Bank's investigation found significant failures by BCP in respect of client categorisation.
It said that as a result of those breaches, certain clients were not afforded the level of investor protection appropriate to their status.
BCP's main investment service is the manufacture and distribution of structured investment products.
These products are tailored to either retail or professional investors with clients ranging from private individuals, pension funds, corporate entities and credit unions.
The products are mainly sold to clients through its network of investment intermediaries.
The Central Bank said the company failed to carry out an adequate assessment of the expertise, experience and knowledge of the clients it treated as professional as opposed to retail.
It also failed to take "all reasonable steps" to ensure that those professional clients met the quantitative test set out in regulations, while it also did not implement appropriate written policies and procedures to categorise those clients.
The Central Bank said that BCP placed undue reliance on clients self-certifying their status and too much weight on the fact that standard form documentation was transmitted to it by investment intermediaries.
Since the Central Bank investigation, the company has taken all necessary steps to rectify the breaches identified.
The head of the Central Bank's Enforcement Investigations, Brenda O’Neill, said that investment firms owe a duty of care to their clients and must place their interests at the heart of everything they do.
"Any failure by a firm to protect those interests is unacceptable," she stated.
She warned that miscategorisation of retail clients as professional clients can have very serious impacts, including a client being exposed to elevated levels of investment risk and a loss of eligibility to investor compensation.
This is the second settlement concluded by the Central Bank this year with an investment firm for failures in respect of compliance with client categorisation requirements.
Ms O'Neill said it serves as a reminder of the importance the Central Bank places on investor protection.
