AMF Enforcement Committee fines an asset management company and its directors for breaches of their professional obligations

What Changed

• This is an enforcement action, not a new regulation, but it reinforces existing AMF requirements under French Monetary and Financial Code for asset managers:
• Operational procedures: Investment allocation processes must be precise, traceable, and fully operational; failure to verify compliance (e.g., loan authorizations) breaches honesty, fairness, and diligence standards.
• Scope of services: Asset managers acting as tied agents cannot provide unauthorized services like placing financial instruments without firm commitment, circumventing permitted investment services.
• Conflicts of interest: Systems must effectively identify, prevent, and manage conflicts.
• AML/CFT due diligence: Procedures, risk mapping, and due diligence on fund assets/liabilities must be operational and systematic.
• Personal liability: Breaches attributable to senior managers result in individual fines.

Suggested Considerations

• Conduct gap analysis: Immediately review investment processes, allocation rules, and traceability against AMF standards; verify authorization of lending entities and service scopes.
• Enhance AML/CFT: Update procedures, risk mappings, and due diligence on fund assets/liabilities; ensure operational effectiveness with documented evidence.
• Strengthen governance: Implement robust conflicts of interest systems; formalize senior manager oversight with personal accountability training.
• Audit marketing/distribution: For tied agents or retrocessions, document service quality enhancements to clients.
• Senior manager certification: Directors must attest to compliance in annual reporting; prepare for AMF inspections by maintaining verifiable records.
• report remediation to AMF Secretary General if breaches identified.

Key Dates

Who is Affected