November 2023 Regulatory Updates

Key dates

10 November 2023

- AMF Enforcement Committee decision SAN-2023-15 imposing fines and bans

14 November 2023

- French version of press release published

16 June 2025

- Conseil d'Etat judgment (n° 490826) dismissing appeals by FSM and Mattouk, confirming sanctions and ordering €4,000 costs to AMF

Suggested considerations

• Conduct gap analysis: Review staff training/qualification records, client assessment processes (questionnaires, scoring, non-interference controls), promotional materials for risk warnings, and disclosure scripts for tied agent status.
• Enhance manager oversight: Implement personal accountability frameworks aligning with senior managers' regimes; document diligence/audit trails.
• Audit CFD marketing: Ensure all ads comply with CFD retail restrictions (e.g., limited-risk accounts only); test client knowledge processes for robustness.
• Training programs: Roll out mandatory training on MiFID II tied agent rules, with pre-hire testing and ongoing monitoring.
• Cross-border review: Non-EU principals (e.g., CySEC-licensed) should audit French tied agents for alignment with host-state rules.

What changed

• This is an enforcement action, not a new regulation, but it clarifies and reinforces existing requirements under French rules implementing MiFID II for tied agents:
• Staff qualifications: Tied agents must verify sales staff have minimum qualifications and knowledge; post-hoc inadequate tests do not suffice.
• Client knowledge/experience assessment: Questionnaires must be robust, with appropriate scoring; account managers cannot interfere (e.g., by prompting answer changes).
• Promotional communications: CFD ads must include prominent risk warnings; bans on promoting non-limited-risk CFD accounts must be followed; banners lacking warnings violate rules.
• Status disclosure: Clients/potential clients must be informed of tied agent status and principal's identity upon first contact.

Suggested considerations

• Enhance surveillance: Implement real-time transaction monitoring for atypical patterns (e.g., timing near announcements, high conviction trades), using tools to flag urgency or unusual order methods.
• Insider list management: Issuers must diligently maintain/update lists under Article 18 MAR, with PDMR disclosures within 3 business days of transactions.
• Training programs: Mandatory annual training on MAR definitions (inside information as precise, non-public data likely to significantly affect prices), disclosure prohibitions, and whistleblower reporting.
• Policies and procedures: Update insider trading policies to cover inducement/recommendation chains (e.g., family/partner risks); conduct pre-clearance for PDMR trades.
• Audit and testing: Perform annual compliance audits on insider handling, with remediation for gaps; prepare for AMF investigations by documenting justifications for suspicious trades.

What changed

This is an enforcement decision, not a regulatory change; it reaffirms existing requirements under EU MAR (Regulation (EU) No 596/2014), transposed into French law via the French Monetary and Financial Code. Key principles upheld include: (i) prohibition on using inside information for trading (Article 14 MAR), (ii) assessing breaches via indicators like transaction timing, atypical volume, order placement methods, and implausible justifications, and (iii) liability for both primary insiders and those receiving information through plausible channels.