• Securities Regulator Enforcement Committee  Sanctions Investment Firm for Failing to Check Authorizations of Business Providers
  • November 13, 2015 | Authors: Philippe Goutay; Anselme Mialon
  • Law Firm: Jones Day - Paris Office
  • A European investment firm passported (on a cross-border basis and through a local branch) to act in France, active in the field of FX trading, provides a number of investment services to French investors. This firm relied on various business providers to increase its client base. The services rendered by these business providers qualified as discretionary portfolio management.

    As part of a routine inspection of the French branch of the investment firm, the AMF found that the business providers did not have the proper authorizations to conduct discretionary portfolio management.

    On October 26, 2015, the Enforcement Committee issued a EUR 200,000 sanction against the investment firm for failing to ensure that the business providers had the proper authorizations enabling them to provide third-party portfolio management services. The decision underlines that the investment firm substantially increased its revenues thanks to the business providers.