AMF News – October 2021

The AMF will apply the ESMA guidelines on advertising in accordance with the EU regulation on cross-border distribution by undertakings for collective investment

The AMF has declared that it complies with the guidelines of the European Securities and Markets Authority (ESMA), applicable from February 2, 2022, relating to advertising and issued in accordance with the European regulation on cross-border distribution by undertakings for collective investment. . These guidelines aim to detail the application of the requirements of EU Regulation 2019/1156. They establish common principles for identifying advertisements; of their true, clear and non-misleading character; and the description of the risks and benefits associated with the purchase of units or shares from an alternative investment fund (AIF) or undertakings for collective investment in transferable securities (UCITS).

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The AMF and the ECB sign a supervisory cooperation agreement

On August 26, the AMF and the European Central Bank (ECB) signed a framework agreement relating to the exchange of information between the two institutions for the purposes of the supervisory missions of the organizations under their joint supervision. The agreement was signed following the adoption of EU Regulation 1024/2013, also known as the Single Supervisory Mechanism Regulation, which obliges the ECB to sign cooperation agreements with the competent authorities of the Member States members in charge of financial markets.

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Decision of September 16, 2021 certifying the amendments to the AMF General Regulations

October 4

On September 16, 2021, the AMF amended its general regulations to clarify the government order (Order) 2017-1674 (known as “Blockchain”), facilitate the activities of clearing members of a clearing house, and increase the rights of depositories of crypto-assets.

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New economic nomenclature of SCPIs and OPCIs

October 14

The French Association of Real Estate Investment Companies (ASPIM) has defined a segmentation of consumer real estate investment companies (SCPI) and real estate collective investment organizations (OPCI). The purpose of this segmentation is to take into account the new type of assets that is developing and to facilitate a better comparison between investment funds and their strategy. Funds will only be able to qualify as diversified if they target more than three types of assets, with no type of asset representing more than 50% in value of the total allocation.
The seven asset prevalence types are office, business, residential (managed or unmanaged), logistics and retail, healthcare and education, hospitality, and alternative (any other type not matching). not to the previous types). Management companies define their own classification based on a fund’s assets or investment strategy.

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Market data: the AMF applies ESMA guidance

October 18

The AMF has indicated that it will apply ESMA’s 19 guidance points on the obligations to publish market data held by trading venues, systematic internalisers, publishing systems and consolidated band providers. These guidance points, which have been published in accordance with the EU MiFIR Regulation and the EU MiFID Director, require that such data be published on a commercially reasonable basis or free of charge.

In particular, the ESMA Guidelines provide details regarding access to market data, provision of data in a non-discriminatory and cost-based manner, cost of use and data separation obligations, transparency of pricing policies and the free availability of market data.

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Investor protection: the AMF publishes a summary of lessons learned from SPOT inspections on the governance of financial instruments

October 19

Following the European directive MiFID2 and the strengthening of requirements in terms of governance of financial instruments, the AMF carried out a series of SPOT checks to assess the implementation of these requirements at five investment services companies belonging to groups. The AMF has observed that regulatory requirements are well integrated into the disclosure process for financial instruments of controlled companies.

In terms of governance of financial instruments, among the bad practices noted by the AMF are the lack of participation of representatives of controlled companies in group committees and the lack of operationality of due diligence methods. The AMF also mentioned the absence of an identified target market for each financial instrument, the failure to take into account the risk ratio of certain instruments and the failure to take into account customer requests when monitoring the target market. The audited companies also displayed shortcomings in the implementation of “negative” target markets and a lack of a critical eye on their patient company’s distribution strategy.

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ESMA proposes new rules for taxonomy regulation – taxonomy-related product disclosure

October 22

EBA, the European Insurance and Occupational Pensions Authority (EIOPA) and ESMA have submitted draft regulatory technical standards (RTS) to the European Commission. RTS concerns financial products that make sustainable investments that contribute to environmental objectives. These RTS projects aim to ensure end investors have access to comparable information so that they can make informed investment decisions and establish a single and unique set of rules for sustainability information under EU Regulation 2019/2088 (also known as the Sustainable Finance Disclosure Regulation [SFDR]) and EU Regulation 2020/852 (also known as the Taxonomy Regulation).

Regarding the products mentioned in Articles 5 and 6 of the Taxonomy Regulation, the regulators’ report offered pre-contractual and periodic information that identifies the environmental objectives to which the product contributes as well as the extent to which the product’s investments align with the Taxonomy Regulation. The report also proposes the inclusion of this pre-contractual and periodic information in the annexes of the mandatory models for sustainable financial products within the meaning of the SFDR. The Commission will decide whether or not to approve the report within 3 months of its publication.

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Loan granting: the AMF publishes the findings of its inspections of six portfolio management companies

October 27

Following the November 2016 approval granted to portfolio management companies to grant loans, the AMF carried out checks on six of these companies, including five SPOT checks and one standard check. The AMF focused on the operations of companies in granting loans, the associated procedures, the conditions for structuring loans, the financial management of the AIFs concerned and the control system.

The asset management companies audited generally had procedures, tools and processes in place for loan origination that gave them an appropriate level of compliance. The areas for improvement mentioned by the AMF relate to the lack of precision in certain procedures concerning credit analysis, financial security management and debt collection, certain steps to be taken in these areas, and the need to fully integrate this activity into the control mechanism.

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ESMA issues statement on investment recommendations made on social media

October 28

ESMA has clarified the definition of investment recommendations, their conditions for publication on social networks and the possible consequences of violations of EU regulation 596-2014 on market abuse. ESMA said any recommendations should be produced and disseminated in an objective and transparent manner so that investors can distinguish between facts and opinions before making an investment decision. It is also essential that an investor can easily identify the source of information and potential conflicts of interest of those making recommendations.
ESMA clarified that false or misleading information may violate EU Regulation 596-2014 and thus lead to fines and referral to European prosecutors for market manipulation.

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2021 non-financial reporting: the AMF encourages listed companies to implement ESMA’s recommendations

October 29

In the context of extra-financial reporting, ESMA has established prudential priorities and recommendations to issuers before their annual financial report for the coming year. The AMF has encouraged listed companies that report their non-financial performance annually to implement ESMA’s recommendations. As part of this reporting, ESMA highlighted three main prudential priorities:

The impact of COVID-19, in particular on the growth of companies’ activities, their action plans and the achievement of their sustainable development objectives in the context of the pandemic
Issues related to climate change (policy, identification and management of risks, indicators and objectives)
Disclosures required in accordance with Article 8 of the Taxonomy Regulation regarding the publication of sustainability indicators so that the EU can identify economic activities considered to be sustainable (the main reporting requirements linked to the Taxonomy Regulation will be applicable from from January 1, 2022.)

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