The AMF Enforcement Committee fines an asset management company for breaches of its professional obligations

The Committee held that Eternam had committed breaches in its marketing of managed alternative investment funds (AIFs) and in its management of club deals – groups of investors who pool their financial resources to successfully complete an investment project. In this respect, it considered that the asset management company had not provided its investors with comprehensive, accurate and understandable information about the retrocession of management fees by the company to its distributors. The Committee also held that the asset management company had not acted in a professional manner when catering to the best interests of investors in its management of club deals, which its decision classifies as Other AIFs.

In addition, the Committee found that Eternam's system for preventing conflicts of interest in the context of joint investment operations was deficient, considering in particular that the asset management company had not implemented this system effectively.

The Committee further held that Eternam did not have an operational procedure for valuing real estate assets and that it had not formalised the work of the independent internal valuer. The asset management company had disregarded its programme of activity, as well as its procedure for selecting and evaluating external experts. It had not selected these experts, and neither had it overseen their contractual relations or monitored and periodically evaluated their services.

Finally, the Committee found that Eternam's anti-money laundering and combating the financing of terrorism (AML/CFT) system was deficient, given the non-operational nature of its AML/CFT procedure and risk mapping, and the insufficient due diligence performed on the liabilities and assets of the funds under management.

An appeal may be lodged against this decision.

About the Enforcement Committee
The Enforcement Committee, which is made up of judges and professionals, has total freedom to make decisions. It can impose sanctions on any person or company whose practices contravene laws and regulations that fall within the jurisdiction of the AMF. It ratifies settlement agreements signed by the Secretary General and respondents. And it takes part in the AMF’s educational efforts by clarifying financial regulations when explaining its decisions.