AMF fines investment services provider

RegulationFrance’s financial regulator has issued a reprimand to Invest Securities, an investment services provider, and fined it €90,000 for failing to carry out the necessary checks prior to the marketing of a British alternative investment fund (AIF) that was not authorised in France.

The Enforcement Committee of the Autorité des Marchés Financiers (AMF) also fined Mr Carlotta and the companies Portal Conseil and Exec Finance, €20,000, €50,000 and €60,000 respectively for having recommended this product to some of their clients, in their capacity as financial investment advisers.

The AMF said that the British AIF, which specialised in the acquisition and resale of real estate assets, entrusted Invest Securities in June 2015 with placing shares in the fund with subscribers.

Invest Securities also entered into several business finder contracts with financial investment advisers, who were charged with putting it in touch with potential clients liable to subscribe to the fund.

The Committee first noted that although Section I. of Article L. 214-24-1 of the French Monetary and Financial Code requires that the marketing in France of an AIF established in a Member State of the European Union be authorised by the AMF, this had not been done in this case.

It also held that for an investment service provider to place shares of a fund with investors without first making sure that the shares were authorised for marketing in France, was a failure of professional conduct and of due care.

Concerning the financial investment advisers, the committee found that they “had not carried out their activity with the due competence, care and diligence that are in the best interests of their clients” due to not checking if the fund was authorised in France, the AMF committee said.

According to the Committee, the breach was aggravated because the three financial investment advisers had not ensured that the product matched up with the clients’ profiles.

AMF said an appeal may be lodged against the decision.

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