France's Autorité des marchés financiers (AMF) published a SPOT thematic synthesis of inspections on how asset management companies monitor compliance with UCITS and alternative investment fund investment ratios, report “active” breaches to the AMF, and handle related investor compensation and complaints. The review sets out 19 good practices and 7 poor practices and highlights data-quality issues in regulatory reporting on ratio monitoring and breaches. The inspections covered five generalist asset managers mainly serving non-professional clients with collective assets under management below EUR 100 billion, over the period 1 January 2021 to 31 December 2023. The AMF reviewed governance, procedures, operational robustness, information provided to unit-holders and the regulator, and internal control arrangements. Common approaches included configuring ratios within an integrated IT tool enabling pre- and post-trade checks, with breaches largely detected automatically but investigated manually; one poor practice identified was failing to regularly reassess the consistency of changes made to the tool’s parameter settings. Across the panel, firms identified between 20 and 800 breaches per year for 100 to 10,000 transactions per year; “active” breaches were four times less frequent than “passive” breaches, and compensation was rare, averaging 4% of active breaches, though potentially reaching several tens of thousands of EUR. The AMF also noted that none of the complaints received related to ratio breaches and stressed the need for robust internal processes to address breaches even without investor complaints.

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