May 2022 Regulatory Updates

Suggested considerations

• Enhance surveillance: Implement real-time monitoring for manipulative patterns, such as aggressive positioning in futures to influence cash bonds or closing prices (e.g., lowering prices via late-session sales).
• Trader training: Mandatory annual programs on MAR prohibitions, emphasizing cross-instrument correlations and "artificial level" tests; document inconsistencies with desk strategies.
• Internal controls: Review and audit trading strategies for deception risks; ensure post-trade analysis flags abnormal volume/price impacts.
• Reporting: Strengthen breach reporting under AMF procedures (Articles 145-1 to 145-4); prepare for cross-border cooperation.
• Compliance reviews: Conduct gap analyses against AMF Enforcement Committee rationales in similar cases (e.g., EcoR1 IPO manipulation).

What changed

This is an enforcement action, not a regulatory change; it reinforces existing prohibitions under the Market Abuse Regulation (MAR, Regulation (EU) No 596/2014) against price manipulation, including fixing prices at abnormal or artificial levels through deceptive trades. It aligns with prior AMF decisions, such as the €20 million fine on Morgan Stanley for similar OAT/OLO manipulations via futures positioning (decision dated 4 December 2019).

Key dates

24 January 2019

AMF Enforcement Committee decision fining Novactifs Patrimoine €250,000 and CEO €100,000 for breaches from March 2014–July 2016

11 April 2022

AMF Enforcement Committee decision imposing 5-year bans and fines (€150,000 firm, €200,000 manager) on DCT/Didier Maurin Finance; appeal dismissed by Conseil d'Etat on 9 September 2024

4 November 2024

AMF fines totaling €5,670,000 on FIA Smart Tréso Conseil, asset managers, and CACEIS Bank for fund marketing/management breaches

5 November 2025

AMF Enforcement Committee decision fining Carat GP and directors €2.5 million total, with permanent/10-year bans (French release: 6 November 2025)

Suggested considerations

• Conduct Documentation Audit: Verify all client interactions include mandatory forms (e.g., initial contact, engagement letter, suitability reports) and explicit risk/remuneration disclosures.
• Enhance KYC and Suitability Processes: Implement robust know-your-customer checks and product authorization verification before recommendations, especially for non-EU funds or unlisted securities.
• Strengthen Conflicts Framework: Maintain a conflicts register, identify/mitigate incentives from issuers, and document procedures.
• Review Activity Scope: Confirm no unauthorized placing or marketing beyond FIA status; limit third-party mandates to natural persons and accredited products.
• Training and Monitoring: Train managers on personal liability; perform gap analysis against AMF decisions and update policies accordingly.

What changed

• This is an enforcement decision, not a regulatory change, but it reinforces and clarifies existing FIA obligations under French regulations (e.g., AMF General Regulation).
• Mandatory delivery of initial contact documents, engagement letters, and written reports to clients.
• Clear specification of remuneration terms and comprehensive risk information for recommended products.
• Thorough KYC to ensure suitability of advice.
• Prohibition on misleading information, such as incorrect guarantor details or omission of issuer financial weaknesses.

Key dates

21 November 2024

- Application date for ESMA Guidelines on ESG fund names (new funds)

30 December 2024

- AMF ESG Doctrine updated to comply with ESMA Guidelines

21 May 2025

- Application date for ESMA Guidelines on ESG fund names (existing funds)

January 13, 2026

- Referenced date for public consultation on General Regulation changes (exact consultation close date not specified in available data)

30 June 2026

- General Regulation of the AMF enters into force, including sustainability risk integration

Suggested considerations

• Participate in consultation: Submit feedback on proposed sustainability integrations via AMF channels to influence final rules.
• Review and update policies: Conduct gap analysis against new sustainability risk requirements in General Regulation; integrate into governance, risk management, and investment processes ahead of 30 June 2026.
• Fund name compliance: For ESG-named funds, ensure 80% investments meet criteria, apply exclusions, and update marketing materials per AMF ESG Doctrine and ESMA Guidelines (immediate for new funds, by May 2025 for existing).
• Enhance reporting: Prepare double materiality assessments, digital xHTML filings for CSRD/ESRS, and SFDR-aligned disclosures; update client onboarding for sustainability preferences.
• Monitor EU developments: Track SFDR revisions, Taxonomy extensions, and ESMA digital taxonomy consultations.

What changed

• - Integration of sustainability risks: The updated General Regulation requires asset management companies to explicitly take sustainability risks into account when complying with existing...
• Alignment with EU sustainability frameworks: Builds on SFDR revisions by advocating for minimum environmental criteria in Article 8/9 products, simplification of rules, and support for CSRD...
• Anti-greenwashing measures: Complements recent AMF ESG Doctrine updates (effective 30 December 2024), enforcing ESMA Guidelines on fund names with ESG terms, such as 80% quantitative thresholds for...