Impacts of the Ukrainian Crisis on Asset Management Companies
March 4, 2022
Asset managers must notably (i) comply with EU sanctions imposed on Russian individuals and entities (obligation of result) and assess the impact of these measures on their activities, (ii) ensure effective monitoring of cyber incidents and notify the AMF of actual incidents and any suspicious behavior, and (iii) implement appropriate and effective measures, procedures and techniques to measure and manage at all times the risks to which asset managers are exposed or likely to be exposed. Asset managers must immediately inform the AMF of any significant problem that may impact their activities. The French Treasury also issued a reminder that the lists of frozen assets must be updated to take sanctioned entities and individuals into account, no later than 24 hours after their publication.
Finally, the AMF has issued a questionnaire on the Ukrainian situation via the ROSA database, which must be completed online. The questionnaire requires firms to declare holdings in Russian, Ukrainian or Belarusian securities in the funds they manage.
Read the full article here.
Sanction: The AMF Enforcement Committee Fined a Media Company and Its Director for Conflicts of Interests and Price Manipulation
March 4, 2022
The AMF Enforcement Committee fined a media company and its director €600,000 and €200,000 for regulatory breaches. Thus, two advertisements published by the company were classified as investment recommendations within the meaning of the Market Abuse Regulation and were found to have manipulated the price. There were also undisclosed conflicts of interest in relation to the advertisements.
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ESMA: Peer Review on Supervision of Cross-Border Activities of Investment Firms
March 10, 2022
ESMA carried out a peer review on the supervision of cross-border activities of investment firms in 2021. It targeted the national competent authorities with the largest number of cross-border activities to non-EU countries: Cyprus, Czech Republic, Germany, Luxembourg, Malta and the Netherlands. ESMA concludes in its report that the national competent authorities must improve the way they manage authorization, ongoing supervision and enforcement work in this area. However, ESMA considers that national authorities have established adequate cooperation and European passporting processes.
ESMA expects to carry out a follow-up assessment in two years to evaluate the improvements achieved by competent authorities considering the report’s recommendations.
Read the article here.
AMF: Modification of the FRA-RAC Questionnaire For 2021
March 15, 2022
The AMF has updated the FRA-RAC questionnaire for the 2021 financial year. The questionnaire will be completed by relevant companies between May 16 and June 16. The sections of the questionnaire that have been modified by the AMF mainly concern the calculation of equity capital, which must include information on the investment of equity capital, cooperation and exchanges of information in the EU, the organization of the company, product governance (distribution channels, average and median investment advice, mandates under management, target market, etc.), risk mapping, and the breakdown of assets under delegated management.
As regards the organization of the compliance and internal control system, companies should now provide information on the number of days dedicated to permanent control (by the asset manager or the group), the detailed number of days outsourced for permanent control, and whether the service provider is a member of a professional association.
The AMF Updates Its Doctrine on the Risk Management System and Program of Activities for Asset Managers
March 21, 2022
The AMF is following up on a summary of its SPOT inspections on the outsourcing of internal control by amending its guide to the organization of the risk management system within asset management companies (DOC-2014-06). This new version applies immediately, except for the provisions relating to the outsourcing of controls that will apply from March 31, 2023. The changes concern notably:
- The organizational framework for the permanent control system: the AMF defines the criteria (i) for drawing up the budget in case of outsourcing, (ii) beyond which the function must be internalized and (iii) for organizing the management of assets
- The separation of the two levels of control (permanent and periodic)
- Selection and monitoring of external service providers (including conflicts of interest)
- Investment management companies that delegate their management activities
The AMF also amends and clarifies the certification procedure and program of activities.
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EU: Entry Into Force of the Transitional Regime of the PRIIPs Regulation for UCITS
March 22, 2022
The transitional period has been extended from December 31, 2021, to December 31, 2022. Thus, undertakings for the collective investment in transferable securities (UCITS) subject to the transitional period are not subject to the Packaged Retail and Insurance-based Investment Products (PRIIPs) Key Information Documents (KID) until January 1, 2023. As of this date, a PRIIP KID will be deemed to meet the requirements of the UCITS KIID for retail investors; for other categories of investors, investment companies and UCITS management companies will be able to choose whether to provide a UCITS KIID or PRIIPs KID.
FinDatEx Published ESG Templates
March 24, 2022
FinDatEx published a first version of its European ESG template (EET) concerning the European requirements for ESG data exchange. It also updated the European MiFID template (V4). The templates are available on FinDatEx’s website.
ESMA Sanctioned a Leading European Trade Repository for Breaches of the EU Market Infrastructure Regulation EMIR
March 24, 2022
ESMA fined a trade repository €186,000 for failures to guarantee data integrity and provide immediate and direct access to competent authorities under EMIR. These failures resulted notably in generating wrong and unreliable reports.
Read the full article here.
EU: Updated Statement of the Supervisory Authorities on Sustainability (SFDR and Taxonomy Regulations)
The three European Supervisory Authorities (EBA, EIOPA and ESMA) have updated their expectations regarding the implementation of the Sustainable Finance Disclosure Regulation (SFDR) and Taxonomy Regulations, including the timeline, the product disclosures under Articles 5 and 6 of the Taxonomy Regulation, and the use of estimates.
Read the full article here.
ESMA Publishes Its Final Report on the EU Carbon Market (Emission Allowances and Associated Derivatives)
March 28, 2022
The report provides an overview of the functioning of emission allowance markets, describes the mechanisms foreseen in the market abuse regulation (MAR) and presents an assessment of data relating to emission allowances, etc. Based on the findings, ESMA sets out policy recommendations and issues to address that might contribute to improving the monitoring of the European carbon market.
Read the full article here.
AMF: The Application of the EU Regulation on Short Selling
March 31, 2022
The Delegated Regulation 2022/27, which came into force on January 31, 2022, amends Regulation 236/2012 on short selling: any natural or legal person who holds a net short position (i) equal to at least 0.1% (instead of 0.2% previously) of the capital of a company listed on the European market or whose principal market for its shares is located in Europe, or (ii) which crosses, upward or downward, a threshold set by 0.1% steps, or (iii) which crosses downward the threshold of 0.5% of the capital, must notify the competent authority.
The authority will disclose net short positions of at least 0.5% of the capital, or which are subject to threshold crossings.
Read the full article here.
