The AMF Enforcement Committee fines a financial investment advisor and its manager for breaches of their professional obligations
Executive Summary
The AMF Enforcement Committee fined a financial investment advisor (FIA) firm and its manager for multiple breaches of professional obligations, including failure to provide mandatory documents, inadequate risk disclosure, poor KYC practices, misleading information, unauthorized placing activities, and improper third-party marketing mandates. This enforcement action underscores the AMF's strict scrutiny of FIAs, emphasizing due care, conflict management, and adherence to status limits, with fines and bans serving as deterrents. Compliance teams should review it for lessons on documentation, client suitability, and outsourcing controls to avoid similar sanctions. #
What Changed
This is an enforcement decision, not a regulatory change, but it reinforces and clarifies existing FIA obligations under French regulations (e.g., AMF General Regulation). Key requirements highlighted include: - Mandatory delivery of initial contact documents, engagement letters, and written reports to clients. - Clear specification of remuneration terms and comprehensive risk information for recommended products. - Thorough KYC to ensure suitability of advice. - Prohibition on misleading information, such as incorrect guarantor details or omission of issuer financial weaknesses. - Strict limits on FIA status: no placing of financial instruments without firm commitment, and requirement for conflict-of-interest procedures. - Direct marketing mandates only to natural persons, not entities, a
What You Need To Do
- Conduct Documentation Audit
- Enhance KYC and Suitability Processes
- Strengthen Conflicts Framework
- Review Activity Scope
- Training and Monitoring
- Record-Keeping
Key Dates
Compliance Impact
Urgency: Medium. This matters as part of a pattern of escalating AMF enforcement against FIAs (fines up to €2.5M, lifetime bans in recent cases), signaling heightened focus on investor protection and governance amid complex products. Firms should prioritize audits now to preempt inspections, but no immediate deadlines apply. Non-compliance risks personal sanctions on executives, reputational damag
Who is Affected
Summary
Sanctions & settlements Investment advice Other professionals Executive & other private individuals Investment services providers The AMF Enforcement Committee fines a financial investment advisor and its manager for breaches of their professional obligations