By two decisions, the AMF Enforcement Committee fines two investment services providers for breaches of their professional obligations
Executive Summary
The AMF Enforcement Committee issued two decisions on 19 June 2023 fining Crédit Industriel et Commercial (€1 million) and Banque CIC Sud-Ouest (€250,000) for breaches of professional obligations in investment advisory services, including inadequate suitability assessments, client classification procedures, marketing of unsuitable instruments, and insufficient controls on costs and fees. This matters because it underscores AMF's strict enforcement of MiFID II-derived obligations, signaling heightened scrutiny on operational systems for client protection and potential for substantial fines based on breach duration and scale. #
What Changed
This is an enforcement action rather than new legislation, but it reinforces existing regulatory requirements under French Monetary and Financial Code and MiFID II transposition: - Obligation to implement an effective operational system for assessing investment suitability in advisory services. - Requirement for compliant client classification procedures aligned with regulations. - Duty to market only financial instruments suited to client profiles. - Mandate for effective control systems over investment advisory activities. - Requirement for clear, accurate, non-misleading information on costs and fees of recommended instruments (specific to Crédit Industriel et Commercial). #
What You Need To Do
- Conduct immediate gap analysis of investment advisory processes against AMF expectations for suitability assessments, client classification, product matching, and control systems
- Enhance traceability and documentation of suitability checks, client categorizations, and cost disclosures to demonstrate operational effectiveness
- Review and strengthen internal procedures for marketing instruments, ensuring alignment with client profiles and regulatory marketing authorizations (cross-reference to similar past cases)
- Implement or audit remedial measures, as considered in fine calculations, including staff training on professional obligations
- Test controls for providing clear cost information to clients, avoiding misleading disclosures
Key Dates
Compliance Impact
Urgency: High – Demonstrates AMF's willingness to impose multimillion-euro fines for systemic operational failures in core client protection areas, with penalties scaled by breach duration, number, and seriousness; firms with advisory services face elevated risk of audits or enforcement if controls are deficient.
Who is Affected
Summary
Sanctions & settlements Journalists Investment services providers By two decisions, the AMF Enforcement Committee fines two investment services providers for breaches of their professional obligations