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The AMF publishes the findings of a new series of SPOT inspections on the quality of regulatory reporting data
11 October 2024

The AMF publishes the findings of a new series of SPOT inspections on the quality of regulatory reporting data

The AMF publishes a new series of SPOT (Supervision of Operational and Thematic Practices) inspections on the processes for producing, checking and transmitting the reports required under the European Directive on Alternative Investment Fund Managers (AIFM) and the Money Market Fund Regulation to the regulator. The regulator also looked at the information transmitted over the ROSA extranet.

This campaign is in keeping with AMF's supervisory priorities for 2023 and follows up on two previous rounds of SPOT inspections on the same subject. The first, published in 2020, dealt with AIFM reporting by asset management companies, while the second, published in 2023, looked at the governance and production process for the annual internal control report, the annual disclosure sheet, the anti-money laundering questionnaire and the information reported over the ROSA extranet.

The data provided to the AMF by asset management companies, through the various regulatory reports or at the request of the regulator, form the basis of several areas of the AMF's work. This data is very useful for the individual supervision of regulated market participants, for cross-sector oversight, and for communicating statistics and studies to the general public and retail investors. AIFM and money market fund reporting is used to monitor systemic risks (within the framework provided by Article 25 of the AIFM Directive) and market trends, and to support coordination with other European and international regulatory authorities, in the case of cross-border funds, for example.

The reliability of this data is therefore a major issue for the AMF in terms of supervision.

The SPOT inspection campaign covered five asset management companies with assets under management of between €1 billion and €150 billion, over the period from 1 January 2021 to 31 December 2023.

For the five asset management companies, the AMF looked at the following points:

  • the organisation and governance of the system for producing, validating, checking and transmitting the data submitted to the AMF through AIFM and money market fund regulatory reports, and over the ROSA extranet;
  • the set of procedures associated with this system;
  • an analysis of the operational process for producing, validating, checking and transmitting the data submitted to the AMF in the AIFM and money market fund reports, and over the ROSA extranet;
  • the internal control system.

The ROSA-based analysis looked at the ‘repository’ section of the extranet, as the products section was not yet active at the start of the inspections.

The AMF publishes a summary of the good and poor practices observed at the five asset management companies. The inspections revealed that the production chain for AIFM and money market fund reporting was highly fragmented at these five companies, both in terms of human resources (outsourcing) and technical resources. This situation creates a higher operational risk.

Nevertheless, the AMF did not identify any instances of deliberate error or omission intended to conceal proven shortcomings from the AMF in the reports analysed from the panel tested in 2024.

In terms of monitoring the external service providers involved in the report production process, the AMF noted that the asset management companies carry out post-production reviews of the AIFM and money market fund reports produced with these external service providers. As part of this review process, some of the external service providers report on the latest findings from their monitoring of regulatory developments in this field.

With regard to the set of procedures, some of the asset management companies on the panel failed to include in the procedure on preparing the regulatory reports, the origin of the source data used to produce them, the control procedures implemented, and the rules for calculating the risk indicators used for the AIFM and money market fund reports.

These control procedures include the gradual implementation by the asset management companies of the data consistency checks made available by the AMF in 2021 and 2022. Mindful of the complexity of the reporting process and the long-term implementation of these checks, the AMF plans to accompany the publication of the summary with a forthcoming dedicated educational initiative.

However, the inspection work has shown that the asset management companies failed to systematically list and analyse (for the purposes of rectifying their respective causes) the successive warnings and rejections issued by the AMF with regard to the AIFM and money market fund reports transmitted.

Finally, in terms of ROSA, the test carried out during the SPOT campaign published in 2023 on the quality of the data uploaded to the ‘repository’ section led to an average gross (before rectification) error rate of 23% being identified. This rate was 11% during this new SPOT campaign for an equivalent level of ROSA coverage.

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

AMF Communications Directorate
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