The AMF Enforcement Committee fines a portfolio asset management company for breaches of its professional obligations

What Changed

• This is an enforcement decision rather than new legislation, but it reinforces and clarifies existing regulatory requirements under AMF professional obligations for portfolio asset managers (sociétés de gestion de portefeuille). Key emphases include:
• Investment/divestment processes must be fully operational, with traceability of compliance checks against fund policies and formalized due diligence before allocations.
• Effective conflicts of interest policies are mandatory when using group service providers, with comprehensive, accurate investor disclosures on related remuneration.
• Full transparency required on retrocessions of management fees to distributors, including justification of added value.
• Robust client categorization and AML/CFT systems, including operational procedures, risk mapping, and adequate due diligence on fund assets/liabilities. No explicit regulatory changes, but these decisions highlight AMF's interpretive stance on opera

Suggested Considerations

• Audit internal procedures: Immediately review investment/divestment, valuation, and allocation processes for operational status, completeness, traceability, and documentation of due diligence.
• Enhance conflict and transparency controls: Implement/test effective conflicts of interest policies for group providers/distributors; update investor disclosures on fees/retrocessions with clear justifications.
• Strengthen AML/CFT and client categorization: Validate risk mapping, procedures, and due diligence; ensure formalization of independent valuer work and external expert oversight.
• Senior manager accountability: Conduct gap analysis attributing responsibilities; train executives on personal liability risks.
• Mock AMF inspections: Simulate Enforcement Committee reviews, focusing on evidence of procedure adherence.

Key Dates

Who is Affected