AMF Sanctions a Financial Investment Advice Company and Its Director for Breaches of Professional Obligations
December 2
On November 30, the AMF’s Sanctions Committee imposed a fine of EUR 25,000 and a permanent ban on undertaking financial investment advice to Firm X and its director at the time the company committed various breaches.
The sanctions were imposed because of breaches relating to the marketing of ROI Land Group securities between 2016 and 2019, the company’s lack of an operational conflicts of interest procedure, its failure to address the conflict of interest with the ROI Land Group, and its failure to identify the source of its clients’ funds.
Read the full article here.
Sustainable Finance Regulation: AFG Report on the Taxonomy Regulation and SFDR RTSs
December 2
On December 2, the Association Française de la gestion financière (AFG) published a report on the Taxonomy Regulation and SFDR RTSs, addressing the main questions that asset management companies have raised. The report clarifies the difference between eligibility to and alignment with the Taxonomy Regulation, explaining that the information to be included in pre-contractual documents and periodic reports from January 1, 2022, is relevant only for the percentage of the portfolio aligned with the regulation. The report also includes the provisional timetable for the application of the Taxonomy Regulation and the SFDR RTSs.
The AFG outlined the applicable requirements as of January 1, 2022, including the ex ante alignment with the Taxonomy Regulation in pre-contractual documents, the qualitative transparency requirements of products and the expected 2021 reporting for the eligibility of the Taxonomy Regulation (by June 30, 2022), and the expected 2023 reporting for the alignment with the Taxonomy Regulation (by June 30, 2024). The report further lays out the new features of the October SFDR RTSs, such as the distinction between Environmental and Social Taxonomy; the required minimum proportion of sustainable investments; and the Do No Significant Harm rules, which are applicable to all sustainable investments.
Read the full article here.
AMF Publishes a Guide on Filing and Disseminating Regulated Information
December 6
The ASPIM has published a guide for filing regulated information to the AMF and disseminating it. The guide features general remarks and details on the use of each type of information appearing in the correspondence table that professional broadcasters use. All information filed must follow precise terminology set out in types and sub-types information, as defined by EU Delegated Regulation 2016/1437 of May 19, 2016. The guide also specifies that all filed information must be disseminated in its entirety, with exceptions for certain financial documents. One or more elements of regulated information may appear in a universal registration document or an AFR. The AMF guide also provides details for continuous regulated information, periodic regulated information, and additional regulated information that must be made public under the law of a member state.
Read the full article here.
AFG Publishes a Position Paper Calling for the Adoption of a Cross-Functional and Coordinated Approach to Financial and ESG Data Providers Operating in the EU
December 9
AFG, Paris Europlace, France Invest and the French Association of Institutional Investors have co-signed a position paper proposing adoption of a transversal and coordinated approach regarding financial and environmental, social and governance (ESG) data providers operating within the EU. The paper puts forward the following three axes: reducing the dependence of European financial actors on data providers, improving the quality of financial and ESG data provided to financial markets and used by investors, and ensuring the application of fair competition practices within the EU. The co-signatories sent the paper to contacts at European institutions, European regulators, and the European financial industry.
Read the full article here.
AMF, ASPIM and AFG Publish a Guide on the Application of Level 1 of the Taxonomy/Real Estate Fund Regulation
December 10
The AMF, ASPIM, and AFG have published model drafts to help asset management companies complete the information to be included in pre-contractual documents and the periodic documents of articles 6, 8 and 9 in the wake of the implementation of level 1 of the Taxonomy Regulation. The document includes standard notices relating to articles 5 and 6 of the Taxonomy Regulation on reporting for SFDR article 9 and article 8 products, respectively. The guide also offers model drafts corresponding to article 7 of the Taxonomy Regulation relating to the disclaimer for SFDR article 6 and 8 products without a sustainable objective.
Read the full article here.
ESMA Publishes 2021 ESEF XBRL Taxonomy Files and ESEF Conformance Suite
December 10
ESMA has published the 2021 ESEF XBRL taxonomy files and updated the ESEF Conformance Suite to facilitate implementation of the ESEF Regulation. The files and updates reflect the requirements contained in the 2021 draft update to the ESEF Regulation and the 2021 update to the ESEF Reporting Manual, with the former expected to enter into force by the beginning of March 2022 in the absence of objections from the European Parliament and Council.
Read the full article here.
The Paris Public Prosecutor’s Office, AMF, ACPR, and DGCCRF Actively Cooperate in the Fight against Financial Scams
December 13
On December 13, the Paris Public Prosecutor’s Office; AMF; Autorité de contrôle prudentiel et de résolution (ACPR); and Directorate General for Competition, Consumer Affairs and Fraud Control (DGCCRF) issued a statement taking stock of the surge in fraudulent investment offers and offers of financial services, the corresponding measures that have been taken, and the means of prevention and the sanctions in place. The authorities reported an escalation of savings and credit scams, Forex trading and “crypto-assets” scams, and bogus offers to invest in airport parking spaces or nursing home rooms. Offenders attract their victims with banner ads on the internet, social networks, mobile messaging applications, news websites, or email. The AMF called for vigilance regarding investment recommendations that do not respect the principles of transparency and objectivity that the European Market Abuse Regulation imposes.
The AMF cooperates with the ACPR through a joint working group set up in 2021, with the Paris Public Prosecutor’s Office to prosecute perpetrators of financial scams, and with the DGCCRF to block access to fraudulent websites.
Read the full article here.
11 ASPIM Proposals for the Non-Listed Real Estate Investment Sector
December 13
The ASPIM has published a list of 11 proposals for the private real estate investment industry following its work with a panel of experts. These proposals revolve around the impact of investment on the housing market, support for the retirement system and employee savings, the mobilization of real estate savings in favour of young workers, environmental issues, internationalization of products, and improvement of the framework for investment vehicles. These proposals seek to promote real estate investment through measures at the European level and through the removal of certain investment barriers.
Read the full article here.
Statement on Transfer of Competences and Duties Relating to Certain DRSPs from NCAs to ESMA
December 14
ESMA has released a statement clarifying the transfer of competencies and duties relating to supervisory and enforcement activity of data reporting services providers (DRSPs) from National Competent Authorities (NCAs) to ESMA as of January 1, 2022. Because of the delay in the European Commission adopting a delegated act encompassing these empowerments, it remains unclear which authority (ESMA or the relevant NCA) would be competent for authorization and ongoing supervision of DRSPs after January 1, prompting ESMA to issue this clarifying statement. ESMA will supervise DRSPs with NCAs becoming supervisors by way of derogation, but ESMA will take over the supervision of DRSPs that are likely to fall under its remit once the delegated act applies, with NCAs encouraged to continue to oversee DRSPs that will likely be subject to derogation from ESMA supervision.
Read the full article here.
ESMA Issues Statement on Supervision of the CO and DTO Following the Benchmark Transition
December 16
In light of the benchmark transition, ESMA has clarified that its proposed draft RTSs on the CO and DTO will not enter into force for the transition to alternative benchmarks of EONIA- or LIBOR-based OTC derivative contracts by the end of 2021. The European Commission has yet to adopt the RTSs, and ESMA encouraged NCAs to take a risk-based approach to their supervisory tasks and not to prioritize their supervisory actions in relation to the CO and DTO for certain IRD classes from January 3, 2022.
Read the full article here.
Reporting on Climate Issues: AMF Publishes a Report Supporting Companies Preparing for Strengthening Regulatory Requirements
December 16
The AMF has published an inventory of the financial and extra-financial reporting of companies on climate issues, noting the progress made since 2019 while pushing for further efforts in view of upcoming European regulatory deadlines and the growing expectations of their stakeholders.
The report highlights the need to improve the reach and justification of organizational and operational scopes as well as the employed methodology to be considered with regard to data on greenhouse gas (GHG) emissions. The AMF also encourages companies to define and make public targets for reducing GHG emissions across the three scopes in the short and medium term and to strengthen their transparency on the physical risks associated with global warming that they face. The report calls on companies to reflect and work on including the consequences of climate change in financial statements.
Read the full article here.
ESMA Updates Four Sets of Q&As
December 17
On December 17, ESMA updated its Q&As relating to the application of the AIF Managers Directive, application of the UCITS Directive, Securities Financing Transaction Regulation data reporting, and the implementation of EU Regulation No. 909/2014 on improving securities settlement in the EU and on central securities depositories.
Read the full article here.
Transaction Settlement Discipline: Supervisory Approach to Implementation of CSDR Measures
December 23
The AMF stated that as of February 1, 2022, central securities depositories and their participants are to comply with the transaction settlement discipline by adopting a specific supervisory approach regarding the buy-in mechanism. The Central Securities Depositories Regulation (CSDR) requires central depositories to declare transaction settlement failures to the relevant authorities. The regulation also sets forth the obligation of fines on participants responsible for the failure and the implementation of buy-in mechanisms allowing the forced execution of unsettled transactions. The first two mechanisms will enter into force starting February 1, with the third to be formally postponed in the first half of 2022.
The AMF expects central depositories, their participants, and related clients to prepare diligently for the February 1 deadline on the improvement of EU transaction settlement discipline but confirms that it does not expect market players to implement the buy-in mechanism on the same day.
Read the full article here.
ACPR and AMF Publish Report on the Climate Commitments of Market Actors
December 28
The ACPR and the AMF published a report on the monitoring and evaluation of the commitments financial institutions made in the Paris marketplace in connection with climate issues after having published a preliminary report on sectoral policies relating to fossil energy in October 2021. According to the report, which contains assessments of the implementation and actualization of the recommendations made in 2020, financial institutions continue to make individual and collective public commitments, such as divestment, exclusion policies, and shareholder commitments.
The ACPR and AMF encourage stakeholders to communicate a clear deadline for their commitments. As part of the implementation of the SFDR and article 29 of the French Energy and Climate Law, they also invite stakeholders to clarify and specify their oil and gas sector policies, based on the efforts carried out on coal. In addition, the ACPR and AMF call on market players to intensify their current efforts and further formalize client support and shareholder engagement policies.
Read the full article here.
Data Breach: CNIL Fines SLIMPAY EUR 180,000
December 30
On December 28, 2021, the Commission Nationale de l'Informatique et des Libertés (CNIL) imposed a EUR 180,000 fine on Firm X , an approved payments institution, for insufficiently protecting users’ personal data and failing to inform them of a data breach. The company collected the personal data of more than 12 million users during an internal research in 2015 and 2016. In 2020, Firm X realized that it had failed to respect its obligations to process the data. The data remained stored on a server that was not subject to a special security procedure and was freely accessible from the internet.
The GDPR violations that the CNIL sites include breach of the obligation to establish a framework, through a formal legal act, for the data processing a subcontractor carried out. Other violations include breach of the obligation to ensure the security of personal data and failure to inform users of a personal data breach.
Read the full article here.
Financial Services Compliance and Regulation
End-to-end governance, advisory and monitorship solutions to detect, mitigate, drive efficiencies and remediate operational, legal, compliance and regulatory risk.
