The AMF publishes the findings of its inspections on the verification and assessment of employee knowledge within asset management companies

The knowledge and skills of financial market professionals are crucial in ensuring compliance with the principles of client protection and market integrity. Their training is key to their ability to exercise their profession, as well as for the financial education of investors, which consequently contributes to their protection.

In 2010, the AMF issued a Position DOC-2009-29 which requires that professionals, and in particular asset management companies, to ensure that their employees who hold key positions have sufficient knowledge. Consequently, they must verify their employees' knowledge by means of an examination, either organised internally, or externally with an AMF “certified body” ("the AMF examination"). The implementation of these obligations by asset management companies is a major supervisory concern for the AMF, as announced in its 2024 supervisory priorities.

As part of a series of short, thematic inspections, called SPOT (Supervision of Operational and Thematic Practices), covering the period from 1 January 2021 to 20 February 2025 and looking at five asset management companies totalling more than €500 million and in excess of €150 billion of assets under management, the AMF examined the knowledge verification and assessment systems adopted by these companies.

These inspections also enabled the AMF to analyse the training systems of these asset management companies with regard to anti-money laundering and terrorist financing, and sustainable finance.

The AMF made the following observations:

• Verification of employee knowledge: in accordance with the current regulations, the asset management company must ensure that any employee recruited to a key position has acquired the necessary knowledge within six months of its appointment. Otherwise, the employee will no longer be able to fulfil this role.
  The procedures put in place in relation to the AMF examination are both clear and detailed. The process for selecting and monitoring the training body responsible for administering the examination is based on objective criteria. In addition, the system precisely defines the people concerned, the timing and training constraints, as well as the arrangements for taking the examination organised by the certified training body.
  With regard to the internal knowledge verification system, the AMF states in its aforementioned doctrine that the verification programme must be applied with the same level of rigour and quality as that required for the AMF examination. However, during its inspections, the AMF found that the standards were lower than those set for the AMF examination, based on internal pass rates. The AMF also observed that the procedures for taking the internal examination were not defined in the agreement between the asset management company and its service provider, nor in any internal procedure.

• Assessment of employees' knowledge and competences: the AMF noted significant disparities between the two supervised entities in this area, both in terms of the formal nature of employee assessments and the associated requirements. Additionally, the AMF found that these two asset management companies encountered the same difficulty in distinguishing between employees subject to verification and those subject to knowledge assessment in their procedures. However, these two concepts correspond to distinct obligations. The first obligation requires asset management companies to ensure that natural persons acting on their behalf have a minimum knowledge base of the European and national regulations necessary to perform key functions. The second obligation requires that the natural persons concerned, who have direct contact with clients, possess the appropriate qualifications and experience to meet the applicable legal requirements and ethical standards, as well as to understand and apply the company's internal procedures. Among the good practices observed, the AMF noted the use of a monitoring tool to manage the assessment of knowledge and skills.

• Anti-money laundering and terrorist financing (AML/FT) training: the AMF found persistent shortcomings on the part of the inspected companies with regard to AML/FT training, which is governed by regulatory requirements that have been in application for several years. Some asset management companies rely solely  on e-learning, without implementing a system to assess the real impact of training on knowledge and understanding of the AML/FT obligations of the asset management company in relation to its specific risks. The AMF underscores that the training offered is not always tailored to the asset management company's own business, making it of little practical use for employees. Furthermore, internal procedures do not systematically specify how frequently the training should be given.
  Certain fundamental concepts, such as asset freezing or the definition of a politically exposed person, are sometimes absent or insufficiently explained. In addition, illustrative case studies on money laundering remain limited, particularly for three of the asset management companies inspected. However, among the good practices observed, the AMF notes the failure to complete mandatory AML/FT training being taken into account in the annual performance appraisal, and a reminder system being in place for employees who have not completed the said training course within the set deadline.

• Sustainable finance training: the AMF notes that good practices have been implemented in the area of sustainable finance training, including the establishment of a structured training plan defining the modules offered, a list of employees concerned and whether each session is mandatory or optional. It observed clear and educational teaching materials tailored to the specific nature of the asset management companies' activities. In addition, specialists in sustainable finance have been appointed to support employees, and passing the AMF exam on sustainable finance is now mandatory for some of them.

• Internal control system: the AMF noted that when management companies delegate controls relating to knowledge verification or AML/FT employee training to their parent group, they either fail to analyze the resulting data or fail to receive it.

In line with the lessons learned about knowledge verification from this SPOT campaign, the AMF has decided to supplement Position DOC-2009-29 by specifying the expected requirements for the internal system to verify employees' knowledge and the procedures to be followed when implementing the internal examination, in order to align this system with that of the AMF examination. The updated position, published today, will come into application on 1 January 2026.

About the AMF
The AMF is an independent public authority responsible for ensuring that savings invested in financial products are protected and that investors are provided with adequate information. The AMF also supervises the orderly operations of markets. Visit our website https://www.amf-france.org/en