Tue, May 9, 2023

AMF, AFG and ESMA Updates—March 2023

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

Guide to Fees and Contributions Due to the AMF

March 2, 2023

Following the amendments imposed by the Finance Act 2022-1726 for 2023, the AMF published its updated guide, relating to fees and contributions due to the AMF. This version entered into force on January 1, 2023 and includes the practical arrangements for settlement of AMF fees.

Read the article here.

Contributions Due to the AMF: A new Complaints Form for Better Monitoring

March 2, 2023

The AMF made available a platform for the filing of complaints relating to fees and contributions to be paid to the authority. The form is available on the AMF’s website and allows the subject entities to verify and monitor their requests and the AMF’s answers.

Read the article here.

Publication of the Climate and Sustainable Finance Commission: Climate Resolutions

March 8, 2023

The Climate and Sustainable Finance Commission published a paper on climate resolutions setting out its members’ preferred approach for the General Assembly to tackle dialogue on climate issues. The Commission’s members developed five recommendations aimed at changing the current framework for both resolutions filed by shareholders and resolutions submitted to the agenda of the General Assembly by companies.

Read the article here.

Letter from the European Commission on Assessment of the Financial System’s Resilience to Stress in the Transition to the EU’s 2030 Goals for the Reduction of Greenhouse Gas Emissions

March 9, 2023

In a letter addressed to the Chairs of EIOPA, ESMA and EBA, the European Commission invited the European Supervisory Authorities (ESA) to conduct a one-off climate risk scenario analysis to assess the resilience of the financial system. As a cross-sector exercise, this is expected to go beyond the usual climate stress tests by also looking at contagion and second-round effects.

Read the letter here.

The European Financial Reporting Advisory Group Issues the Set of Bases for Conclusions for Its First Set of Draft European Sustainable Reporting Standards

March 10, 2023

Following the submission of the first set of draft European Sustainable Reporting Standards (ESRS) to the European Commission in November 2022, the European Financial Reporting Advisory Group (EFRAG) issued its set of basis for conclusions, which complement the first set of draft ESRSs developed.

Read the article here.

Verena Ross' Speech at a Commissione Nazionale per le Società e la Borsa Conference: “The New Frontiers of Digital Finance”

March 10, 2023

Varena Ross, ESMA Chair, provided a speech at the Commissione Nazionale per le Società eta e la Borsa conference on the “New Frontiers of Digital Finance.” During her speech, Ross discussed some key technological developments as well as the benefits and risks that they bring (e.g., cyber risk). The ESMA Chair expanded furthe on how ESMA and the other ESAs and NCAs are working on promoting a secure and resilient environment and the challenges that lie ahead.

Read the full speech here.

Q&A: Application of the AIFMD

March 10, 2023

ESMA updated its Q&A on the application of the AIFMD to include a new section on exemptions. The section includes a clarification of the notion of “substantive direct or indirect holding.”

The Q&A states that the notion of “substantive direct or indirect holding” refers to situations where the AIFM manages the portfolios of the alternative investment funds (AIF) through its direct or indirect holding in a company. In addition, the Q&A specifies that this covers, for instance, “situations where.by the AIFM de facto has the power to impose decisions on the AIF portfolio composition, its asset allocation, or its risk management.”

Lastly, the Q&A specified that the AIFMD does not set a quantitative threshold and therefore the notion should be assessed on a case-by-case basis.

Read the article here.

Annexes to the Sustainable Finance Disclosure Regulation — Gas and Nuclear — AMF Expectations: Clarifications

March 15, 2023

RTS relating to the SFDR have been amended by the European Commission and went into effect in February 2023, to include disclosures related to nuclear and gas activities.

Any periodic reports published starting from February 20, 2023, should include the most up-to-date version of the RTS (i.e., including nuclear and gas).

Regarding precontractual documents:

  • All new funds classified as Articles 8 and 9 under SFDR for which the authorization package was submitted as of March 15, 2023 shall use new templates
  • Existing funds classified as Articles 8 and 9 should update the templates before September 1, 2023. However, this deadline could evolve if the European Commission or ESMA provide clarifications.

Read the article (member access only) here.

Order of February 1, 2023 Ratifying Amendments to the General Regulation of the AMF

15 March 2023

The Order of February 1, 2023, published in the Official Journal of February 11, 2023, amends Section IV of the AMF General Regulation. These amendments are intended to clarify that collective investment schemes, or their asset management companies, are required to publish the net asset value of their units or shares in the event of suspension of subscriptions and redemptions when they are able to calculate them accurately.

Read the order here.

The AMF Fines the Head of Consolidation of a Listed Company for Insider Dealing

March 20, 2023

The AMF Enforcement Committee imposed a fine of €700K on the Head of Consolidation for using inside information for his own benefit twice. The inside information related to the results and objectives of the listed company. The committee considered that the Head of Consolidation was a primary insider and had made improper use of this information by acquiring derivative financial securities of the listed company.

Read the decision here.

Sustainable Finance Disclosure Regulation: The AMF Publishes a Study on Classifications and Fossil Fuel Exposure in the French Funds Universe

March 24, 2023

The AMF drew up its first overview of the breakdown of the French market as well as fund classifications introduced by the SFDR, nine months following after it went into force. The assessment covers 10,616 French collective investment schemes, representing assets under management of more than €1.9 trillion as at the end of 2021. This study does not take into account subsequent reclassifications made by some funds.

The AMF found that a fifth of French funds (i.e., 1,963 funds) representing half of the total assets under management (AuM) in France were classified as Article 8 or 9. Article 8 funds accounted for over 47% of the total AuM in France whereas Article 9 funds represented 3% of the total AuM in France, and are better represented within equity funds.

Read the study here.

AMF Presents Its Proposals to Improve the Readability of Financial Product Fees in European Law

March 28, 2023

As requested by the AMF, the Financial Sector Consultative Committee and the French supervisory authority drew up a table summarizing all costs and charges with the objective to develop a more explicit fee presentation table of costs for investors.

Given the difficulty of reconciling current requirements of MiFID II and PRIIPs, this table is an alternative presentation to the current display rather than a new requirement or an additional element. Any changes would require an evolution of the MiFID II Regulation.

The AMF found that publishing this table would be a useful contribution to the European Commission's discussions relating to the Retail Investment Strategy.

Read the article here.

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