Giorgio Vincent Sim

The Chairman of Consob has issued an order suspending the administrative bodies of Giorgio Vincent Sim , with registered office in Nizza Monferrato (AT), for sixty days and appointing Giovanni Ossola as special administrator to take over its management (Order 17/2002 of 23 October 2002). The measure specified that during the period of special administration the company had to:

- reconstruct the use made of client's cash balances and put in place procedures and organizational mechanisms to ensure the separation between company and client assets;

- determine the company's capital and reserves for the purpose of complying with supervisory capital requirements. At the same time, the special administrator must check whether the portfolio management fees charged still include so-called transaction commissions and, if so, take all the necessary steps to bring the fee system into line with Consob Communications 20844 of 16 March 2000, 1009635 of 8 February 2001 and 1011290 of 15 February 2001;

- put in place procedures for the service of individual portfolio management permitting the rates of return on portfolios to be constantly monitored.

The measure was adopted under Article 53.1 of the Consolidated Law on Financial Intermediation in the light of the findings of Consob's supervisory activity, which showed that the company had committed serious violations of statutory and regulatory provisions that had created a situation of serious danger for the company's clients.

In particular, it was found that there had been commingling of assets in violation of Article 22 of Legislative Decree 58/1998 in the context of a highly personalized management of the company and that procedures for monitoring the performances of the portfolios under management were totally lacking, so that it was impossible for the company to inform clients promptly in the event of losses, as required by Article 28.4 of Consob Regulation 11522/1998 on intermediaries. (In Consob Informa n. 41/2002 - 28 October 2002).