Financial Crime World

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Anti-Money Laundering and Terrorist Financing Regulations for Portfolio Asset Management Companies

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The Autorité des Marchés Financiers (AMF) has established guidelines to ensure that portfolio asset management companies comply with anti-money laundering and terrorist financing regulations. This article provides a summary of the key points related to due diligence, risk assessment, and information collection.

Entities Subject to Due Diligence

The following entities are subject to due diligence:

  • Entities in France or another EU/EEA Member State: These entities are subject to anti-money laundering rules.
  • Companies with securities admitted to trading on a regulated market: Companies whose securities are listed on a regulated market in France or another EU/EEA Member State (or equivalent third country) must undergo due diligence.
  • Public authorities or public bodies: Public authorities and public bodies must also comply with these regulations.

Due Diligence Approach

Portfolio asset management companies will determine the scope of due diligence based on a proportionate approach, taking into account the identified risk level. This means that:

  • High-risk situations require enhanced due diligence measures.
  • Low-risk situations, such as investing in shares or bonds traded on a regulated market, involve minimal due diligence.

Additional Information to be Collected

When making an investment in a company whose securities are not admitted for trading on a regulated market, portfolio asset management companies must collect reliable information about the issuer and its beneficial owners. This includes:

  • Identity of the management and beneficial owners: Gather accurate information about the company’s leadership and ownership structure.
  • Financial data to assess consistency with the company’s business: Review the company’s financial statements and other relevant documents to ensure they align with its operations.

Specialised Sectors

Portfolio asset management companies specialising in real estate must perform due diligence adapted to the nature of their target assets. This includes:

  • Counterparties to property acquisition and disposal transactions: Ensure that all parties involved in property transactions are properly identified and verified.

By following these guidelines, portfolio asset management companies can ensure compliance with anti-money laundering and terrorist financing regulations, protecting their clients’ interests and maintaining the integrity of the financial system.