The AMF hits 123 management companies with a regulatory fine of €200,000
The French regulator, the AMF, has fined 123 management companies €200,000 through its enforcement committee for a series of compliance failures.
The fine follows an investigation and public hearing into proceedings relating to the marketing and disclosure of information to third parties. The AFM’s investigation revealed that these systems were not operational insofar as they contained inaccurate regulatory references and did not specify the checks carried out by the head of compliance and internal control.
The French regulator’s enforcement committee said the company was under scrutiny for a series of control failures. It also found that 123 investment managers had failed to provide accurate, clear and non-misleading information about “the characteristics of the funds under management and the fees charged in their emails, videos, reports and in a letter sent to investors”.
The asset manager said it will cover the sum of existing provisions in its balance sheet and the decision will have no impact on the group’s financial results.
However, the committee found that 123 Investment Managers had not failed in its duty of professionalism by not informing its clients, during the period under review, of “the existence of an adviser to the fund or the management company.
The committee also noted that 123 management companies had actually provided this information to clients during the fund creation phase. It also rejected this alleged failure to pay the management fees relating to the adviser, after finding that he had not acted in a manner contrary to the rules of the fund in question.
“The committee also found that 123 investment managers did not have procedures for tracking advice received from third parties and that it did not follow that advice and the management decisions taken as a result,” the statement said.
The AMF turns to FX brokers
The AMF, as part of its enhanced market surveillance, earlier this year imposed a fine of €300,000 on the Polish listed foreign exchange brokerage firm XTB to settle the charges.
XTB’s French subsidiary has been accused of publishing misleading advertisements and failing to do due diligence with new customers.
The Autorité des marchés financiers said it fined XTB for numerous regulatory breaches between November 2013 and February 2020.
During a review of XTB’s compliance over the period, the AMF found that X-Trade Brokers breached its restrictions on selling contracts for difference (CFDs) to retail clients. The watchdog added that the broker failed to put proper risk warnings on its website, apparently changing some of the wording used in its marketing materials. In Europe, CFD regulations impose a standardized risk warning, including the percentage of losses on retail investor accounts of a CFD provider.