Gouvernance des produits – directive MIF 2 : l’AMF applique les orientations révisées de l’ESMA

The AMF has recently updated its Position DOC-2018-04 to align with the revised guidelines issued by ESMA concerning product governance requirements and also to extend the applicability of these guidelines to FIAs.
The background to these changes stems from ESMA’s initiative in early 2022 to update its guidelines on product governance requirements, driven by evolving regulations that necessitate the consideration of sustainability related objectives in target markets. These regulations are rooted in the Delegated Directive (EU) 2021/1269 of the European Commission and were incorporated into French law through the AMF’s general regulation in July 2022.
ESMA’s final report on the updated guidelines was published in March 2023, with translated versions made available in August 2023. The primary goal of these updated guidelines is to enhance clarity in the implementation of product governance requirements and promote consistent interpretation and supervision, thereby strengthening investor protection.
Position DOC-2018-04, which encompasses the new ESMA guidelines, applies to investment firms, including management companies offering investment services. Specifically, it mandates that investment service providers, when delivering investment services with an assessment of appropriateness, must verify the „type of clients“ and „knowledge and experience“ criteria of the target market.
While ESMA guidelines do not directly apply to FIAs due to their operation under a French national regime, the AMF has decided to extend the scope of these updated guidelines to include FIAs. These amendments became become effective on 3 October 2023.
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To facilitate the above extension, Position-Recommendation DOC-2006-23, which contains Questions and Answers and offers guidance concerning the regulatory framework governing Financial Investment Advisors in France, has been updated accordingly. 3 versions (only available in French) are currently relevant:
DOC-2006-23 Version 5 (which was applicable from 21 December 2022 to 2 October 2023)
DOC-2006-23 Version 6 (currently in application from 3 October 2023 to 31 December 2023)
DOC-2006-23 Version 7 (which will be applicable as of 1 January 2024)
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Comparing Version 5 to Version 6, yet a second question bearing the number 4.4 was added, and questions 4.8 to 4.10 together with question 6.4 were added. Of note, question 5.1 was deleted. Here those respective new questions of Version 6 translated into English, together with a short summary of their corresponding answers:
#### 4.4b. What is the AMF doctrine applicable to CIFs concerning anti-money laundering and counter-terrorism financing?
CIFs must follow AMF doctrine, including positions and recommendations on risk factors, risk-based approaches, due diligence, politically exposed persons, TRACFIN reporting, EBA guidelines, and remote business relationships. They must also comply with asset freezing obligations outlined in the AMF’s guide.
#### 4.8. Can a CIF consider a non-professional client as a professional client „on option“?
No, CIFs can’t categorize non-professional clients as professional „on option.“ CIFs follow objective criteria for categorization, even if an investor’s wealth exceeds thresholds, and CIFs don’t offer this option, unlike investment service providers (PSIs).
#### 4.9. Can a CIF use a PSI’s client categorization?
No, CIFs can’t use PSI’s client categorization; it’s specific to the PSI’s services.
#### 4.10. Can a CIF provide both independent and non-independent investment advice?
CIFs can provide both types of advice but not by the same individual or executive. The CIF clearly specifies the nature of advice in client documents. Organizational separation ensures clients receive suitable advice without confusion.
#### 6.4. Is a CIF subject to obligations for complaint handling?
Yes, CIFs have obligations for handling complaints from clients, as per AMF regulations and instruction DOC-2012-07.
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Finally, comparing Version 6 to Version 7 of DOC-2006-23, the second question bearing the number 4.4 was not re-numbered, but two new questions were added inbetween questions 4.9 and 4.10, hence shifting the former question 4.10 to position 4.12. Here those respective new questions of Version 7 translated into English, together with a short summary of their corresponding answers:
#### 4.10. To what extent should a CIF advising a client on an actively managed collective investment scheme take into account the fee level in suitability assessments?
In accordance with paragraph VIII of Article 325-8 of the AMF General Regulation, CIFs are required to have an appropriate procedure that determines, considering their cost and complexity, whether other investment services or equivalent financial instruments may match their clients‘ profiles. The AMF suggests that under this provision, CIFs assessing whether less expensive collective investments could be suitable for their clients should have a procedure to evaluate the long-term relationship between the fee level of actively managed funds and their proximity to the benchmark’s performance, possibly through tracking error calculations.
#### 4.11. To what extent should a CIF advising a client on a passively managed collective investment scheme take into account the fee level in suitability assessments?
In accordance with paragraph VIII of Article 325-8 of the AMF General Regulation, CIFs are required to have an appropriate procedure that determines, considering their cost and complexity, whether other investment services or equivalent financial instruments may match their clients‘ profiles. The AMF suggests that under this provision, CIFs assessing whether less expensive collective investments could be suitable for their clients should have a procedure to compare the fee level of passively managed funds with that of comparable funds.