AMF amends its Programme of Operations Guide for Asset Management Companies

Integration of new rules governing arbitrage mandates

Article 35 of the French Green Industry Act (Act No. 2023-973 of 23 October 2023) provides a framework, within the French Insurance Code, for arbitrage operations under a mandate performed in connection with life insurance policies or capitalisation contracts on or after 24 October 2024. For several years now, the AMF has been calling for a legislative framework for these types of operations, through the ACPR-AMF Joint Unit.

Under the new rules, asset management companies will need to be registered as insurance intermediaries with ORIAS to carry out these operations for all mandates entered into on or after 24 October 2024 (including for current mandates automatically renewed on or after that date).

The AMF has amended its Position-Recommendation DOC-2012-19 to reflect the new rules:

• for arbitrage operations under mandates entered into on or after 24 October 2024 (or automatically renewed on or after that date), the AMF has removed, from its doctrine, the provision requiring asset management companies to undertake to apply organisational and conduct of business rules for these operations that are almost identical to those applicable to portfolio management services on behalf of third parties;
• for arbitrage operations carried out under current mandates entered into before 24 October 2024 (that have not been automatically renewed on or after that date), the AMF has maintained its doctrine, unless the asset management company elects to apply the new rules for the current mandates.

The table of ancillary operations set out in Annex II to Instruction DOC-2008-03 (Sections from the programme of activity) has been adjusted accordingly.

Strengthening and formally recording the monitoring of capital requirements

Under the amended version of Position-Recommendation DOC-2012-19, asset management companies must provide the AMF with a formal document tracking their regulatory capital requirements over time.

This document must include a statement of capital broken down by item, including not only the calculation of quantitative capital requirements, but also an analysis of qualitative requirements relating to the nature and characteristics of capital instruments, along with details demonstrating compliance with capital investment obligations.

The AMF also requires asset management companies to inform it as soon as possible after becoming aware of any non-compliance with capital requirements, including on the basis of interim or provisional financial statements.

Clarification of the scope of expenses deductible from overheads 

The types of expenses that can be deducted from overheads when calculating the regulatory minimum capital requirement threshold have been extended. 

Fees paid by asset management companies to remunerate entities to which they have delegated the management of collective investments and/or individual portfolios, as well as fees paid to remunerate service providers who provide them with investment advice if these are variable charges directly linked to the management fees earned by the asset management companies, may now also be deducted.

Clarification concerning the appointment of the effective managers of asset management companies incorporated as a French société anonyme with a board of directors

The AMF stipulates that chief executive officers of asset management companies incorporated as a French société anonyme with a board of directors must be treated as one of the company's effective managers.

Updated definition of RTO services

The new version of Position-Recommendation DOC-2012-19 takes into account the changes made to the definition of the order reception and transmission service (RTO) in Article D. 321-1 of the Monetary and Financial Code, as amended by Decree No. 2023-813 of 22 August 2023, which repealed the requirement that the person receiving a transmitted order for a transaction must be an investment services provider.