* Aberdeen told to hold 475 mln stg, up from 335 mln
* Firm had 553 mln stg in cash at end-March
* Credit Suisse analysts see no hit to dividend (Adds background, FCA)
By Maiya Keidan and Simon Jessop
LONDON, Sept 12 (Reuters) - Aberdeen Asset Management must increase the minimum amount of cash it holds as aregulatory capital buffer after changes to the way Britain'sFinancial Conduct Authority (FCA) models potential risks, thefirm said on Monday.
It is the latest sign of how regulators are taking a closerlook at an asset management sector that has expanded since the2007-09 financial crisis, while banks have shrunk.
The suspension of property funds by Aberdeen and othersafter Britain's vote in June to leave the European Union alsoraised questions about the sector.
The FCA raised Aberdeen's total regulatory capital minimumto about 475 million pounds ($631 million) from a previousrequired level of 335 million, although the firm had chosen tohold at least 100 million pounds more than that.
At end March, Aberdeen held 553 million pounds in cash.
The firm said as a result of the FCA's new guidance it woulddo away with its previous policy of holding at least 100 millionpounds in excess capital but did not provide details.
The FCA's decision followed a periodic review of Aberdeen'scapital position and changes to the way the regulator factoredin insurance and unquantifiable risks when modelling risk, thefirm said in a statement.
The FCA had no comment.
The watchdog has ruled that the asset management sector canno longer insure itself against some risks and must instead holdcapital to cover them, a person familiar with the matter said.In addition, the FCA looked at whether asset managers shouldhold extra capital to cover firm-specific risks.
Aberdeen says these two factors contributed "roughly" equalamounts to the capital hike.
It appears to be the first to make an announcement on theoutcome of the FCA's sector-wide scrutiny.
Analysts at Credit Suisse, in a note to clients, saidAberdeen's comfortable first-half cash buffer of 218 millionpounds above that required and favourable market moves meantthere was a "good chance" its dividend would be maintained.
"It seems the FCA's regulatory gaze has now fixed upon theasset managers and so we would be surprised if Aberdeen is aloneamongst its peer group in being required to hold more capital,"they said.
"Aberdeen's prudent decision to hold a capital buffer hasbeen vindicated and, save for a material downturn in markets, weexpect shareholders will benefit via dividend stability."
Asset managers are also waiting for the FCA's review of feesin the sector.
($1 = 0.7531 pounds) (Additional reporting by Huw Jones, editing by Jason Neely andSusan Thomas)
