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

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

Please note that the French version of this press release was published on 11 July 2022.

In its decision of 6 July 2022, the Enforcement Committee imposed a fine of €200,000 on 123 Investment Managers. In its decision of 6 July 2022, the Enforcement Committee imposed a fine of €200,000 on 123 Investment Managers.

The Enforcement Committee first found that 123 Investment Managers' procedures relating to marketing and disclosure of information to third parties were not operational insofar as they contained inaccurate regulatory references and did not specify the controls carried out by the compliance and internal control officer.

It also found that 123 Investment Managers had failed to provide accurate, clear and non-misleading information on the characteristics of the funds under management and the fees charged in its emails, videos, reports and in a letter sent to investors.

However, the Committee found that 123 Investment Managers had not breached its obligation to act in an honest, loyal and professional manner by not informing its clients, during the period under review, of the existence of an advisor working with the fund or the management company. The Committee noted that 123 Investment Managers had indeed provided this information to clients during the fund’s creation phase. It also dismissed this alleged breach with regard to the payment of part of the management fees to the advisor, after noting that 123 Investment Managers 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 a procedure for tracing advice received from third parties and that it did not track this advice and the management decisions adopted as a result.

Lastly, the Committee found that 123 Investment Managers had failed to carry out controls on the fund management advice it received from external advisors.

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.

AMF Communications Directorate