The AMF updates its policy on portfolio asset management company control systems and programmes of operations
The AMF has updated its policy in order to clarify its expectations in light of a summary of SPOT inspections on the outsourcing of internal control in portfolio asset management companies. It has also updated the policy on the authorisation of portfolio asset management companies to take account of the rollout of the ROSA extranet and the overhaul of the programme of operations for portfolio asset management companies.
The AMF's expectations for the organisation of risk management, compliance and control systems within portfolio asset management companies
In November 2020, the AMF published a summary of its SPOT inspections on the outsourcing of internal control by portfolio asset management companies. Drawing on the lessons learned from its findings, the AMF has clarified the following points in its Guide to the organisation of risk management, compliance and monitoring systems in portfolio asset management companies (Position-Recommendation DOC-2014-06):
- Organisational models for permanent control systems based on total assets under management, and in particular the thresholds above which the function is expected to be insourced, and the preparation of budgets for outsourcing permanent control to an external service provider;
- Separation of second- and third-level controls;
- Criteria to be taken into account when selecting an external service provider to carry out control tasks, as well as the measures to be put in place as part of the monitoring of the service and the termination of the contract between the service provider and the portfolio asset management company;
- Management of conflicts of interest with external service providers in charge of an ongoing and/or periodic control engagement;
- The specific case of portfolio asset management companies that delegate most of their management activities.
The AMF is also revising its policy to incorporate the elements of ESMA's revised guidance on the MiFID compliance function (ESMA35-36-1952) that are relevant to the management of UCITS and AIFs.
Timeline for new positions and recommendations
With specific regard to the amendments to Position-Recommendation DOC-2014-06, all new positions and recommendations shall take immediate effect, except for positions relating to the organisation of the permanent control system in the event of outsourcing, which will be effective as from 31 March 2023. Instruction DOC-2012-01 on the risk management organisation of collective investment undertaking management activities and discretionary portfolio management investment services has been revised to take some of the above changes into account.
Other clarifications on the authorisation and programme of operations of portfolio asset management companies
The Guide to preparing the programme of operations for asset management companies and self-managed collective investments has been updated:
- To reflect the rollout of the ROSA extranet, a new tool for communication between portfolio asset management companies and the AMF, and the revision of the format of the authorisation grid and the programme of operations for portfolio asset management companies;
- To clarify the AMF's expectations regarding the organisation of a portfolio asset management company when it manages collective investment schemes distributed under life insurance policies;
- To remove the requirement to disclose, at the time of authorisation of a portfolio asset management company, shareholders with a stake in the company of between 5% and 10%. This requirement has already been removed from Instruction DOC-2008-03.
This document will also be updated in the near future to take account of the new capital requirements for portfolio asset management companies, in particular with regard to Regulation (EU) 2019/2033 of the European Parliament and of the Council of 27 November 2019 on prudential requirements of investment firms.
A new form is also proposed in Instruction DOC-2008-03 that allows a portfolio asset management company whose authorisation schedule restricts it to professional clients or to hedging transactions for certain futures and related embedded derivatives to ask the AMF to lift the restriction.
On the same topic
Head of publications: The Executive Director of AMF Communication Directorate. Contact: Communication Directorate – Autorité des marches financiers 17 place de la Bourse – 75082 Paris cedex 02