Key dates
- 30 December 2022
- - AMF Enforcement Committee decision SAN-2023-01 imposing fines and sanctions
- 7 August 2023
- - Conseil d'État rejects preliminary constitutionality question
- 13 June 2025
- - Conseil d'État dismisses appeals (n. 471548, 471744), upholding sanctions and ordering €3,000 costs to AMF
Suggested considerations
- Review portfolios: Audit UCITS/AIF holdings for liquidity, rating compliance, prospectus alignment, and issuer/counterparty limits; divest non-eligible assets.
- Enhance due diligence: Implement robust processes for unlisted/illiquid securities valuation, liquidity risk modeling, and repo unwind risks; document all assessments.
- Strengthen governance: Senior managers must oversee investment ratios and eligibility; update procedures for buy & sell backs in exposure calculations.
- Depositary checks: Verify oversight of management company systems for ratios, legality, and prospectus terms.
- Training/remediation: Conduct firm-wide training on UCITS rules; test controls against AMF/FCA principles (e.g., skill/care, regulator relations).
What changed
- This is an enforcement decision, not new rules, but it reinforces existing UCITS requirements under French Monetary and Financial Code and AMF regulations:
- UCITS investments must exclude illiquid, unrated securities outside prospectus scopes; liquidity risks must be properly assessed to ensure redemption capabilities.
- Debt holdings per issuer capped at 10%; counterparty exposure (e.g., 5% limit) must include all relevant transactions like buy & sell backs.
- Reliable valuation information required; risks of unwinding transactions at market value must be evaluated.
These align with parallel FCA findings on due diligence failures for Tennor investments...
Compliance impact
Urgency: High - Finalized enforcement (June 2025) with massive fines (€93M total) and bans demonstrates AMF's willingness to pursue personal/executive liability for UCITS breaches, especially cross-border. Matters for firms with illiquid strategies, as it amplifies post-2020 liquidity crisis lessons (e.g., H2O fund gates), risking similar sanctions amid rising AMF actions on depositaries and managers.