Tue, May 9, 2023

AMF, AFG and ESMA Updates—January 2023

The Financial Services Compliance and Regulation practice of Kroll provides updates from the ESMA, and the AMF for asset managers during January 2023.

Best Practice Guide for Private Debt: Sustainability-Linked Financing

January 1, 2023

France Invest has published a best practice guide for private debt on sustainability linked financing. The objective is to promote good practices for those involved in the “implementation of sustainability-linked financing”, improve the integrity of these tools and prevent greenwashing.

Read the article here.

AMF: The AMF Sanctions a UK Asset-Management Company for Several Breaches of Their Professional Obligations

January 3, 2023

The Commission imposed fines on a UK asset manager and two executives (each with a disciplinary sanction): €75 million, €15 mn and €3 mn for several breaches committed in the management of French domiciled investment funds. The Commission found that the firm:

  • Had not complied with investment ratios applicable to UCITS vehicles.
  • Had conducted transactions involving securities that were not eligible for investment by UCITS
  • Had not sufficiently taken into account market and liquidity risks which would prevent the funds from unwinding these transactions at their market value, 
  • Had breached the counterparty risk exposure ratio of 5% to a single counterparty, which applies to UCITS funds.

Read the article here.

ESMA: ESMA and National Competent Authority Will Launch a Common Supervisory Action on MiFID II Disclosures

January 3, 2023

ESMA and National Competent Authorities (NCA) will launch a common supervisory action on MiFID II disclosure relating to marketing communications. ESMA & NCAs will review whether marketing communications are fair, clear and straightforward.

ESMA also advised that the Common Supervisory Action will also address greenwashing as part of the review.

Read the article here.

AFG: The AFG Published an FAQ Document on the Packaged Retail Investment and Insurance Products Key Information Document

January 3, 2023

The AFG updated its FAQ relating to Regulation (EU) 1286/2014 Packaged Retail Investment and Insurance Products [PRIIP]s Regulation and its delegated acts. This version includes Q&As relating to the amendments introduced in Commission Delegated Regulation (EU) 2021/2268 that are applicable as of January 1, 2023.

Read the FAQ (member access only) here.

AMF: The AMF Published Their Supervisory Priorities for 2023

January 9, 2023

The AMF published its actions and supervisory priorities for 2023.

Priorities for Action:

  • Raising public awareness of the risks of scams and encouraging distributors to market products that are properly suited to different investor profiles. The AMF will also take action in relation to high-risk investment opportunities and their promotion by social media influencers on social networks. 
  • Taking action on improving transparency, resilience, and efficiency in financial markets
  • Accelerating the transition to mandatory authorization for digital asset service providers currently not within scope of the national regime in France, aligning with the future Markets in Crypto-Assets (MiCA) framework
  • Improving the regulatory framework for sustainable finance and combating greenwashing by supporting preparation of the CSRD implementation and a review of Sustainable Finance Disclosure Regulation (SDFR) reporting, notably around data quality.

Supervisory Priorities:

  • Cybersecurity with a focus on due diligence conducted on external service providers
  • ESG: SFDR and index administrators
  • Governance and human resources of management companies and risk control systems
  • ROSA: quality of data reported under the regulations on Money Market Funds (MMF), Alternative Investment Funds Managers Directive (AIFMD) and on regulatory ratios 
  • Post-trade transparency data quality under European market infrastructure regulation (EMIR) and Securities Financing Transactions Regulation (SFTR) for bonds
  • Marketing, commercial documentation and handling of investor complaints

Read the article here.

ESMA: An Open Hearing Consultation on Environment Social Governance

January 23, 2023

On February 20, 2023 ESMA held an open hearing on its consultation paper on ESG terms in funds’ names.

This hearing is of interest to:

  • Investors and consumer organisations
  • Investment firms
  • UCITS management companies and external Alternative Investment Fund Managers (AIFMs) when providing investment services
  • Any relevant trade associations.

Read full article here.

Recruitment Guide: Data Protection Basics and Q&A

January 30, 2023

The recruitment process requires the recruiter to collect, organise, consult, store, communicate or delete personal data of applicants. These data processing operations must comply with the General Data Protection Regulation. Therefore, the Commission Nationale de l'Informatique et des Libertés has published a recruitment guide to assist firms throughout the recruitment process.

Read the article here.

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