France issued most number of sanctions under AIFMD between 2013 and 2022
France issued the largest amount of financial penalties (€79.14m) between 2013 and 2022, followed by Poland (€14.41m) and Italy (€2.9m), according to ESMA’s latest AIFMD sanctions report.
In contrast, the paper reveals that no penalties were issued under AIFMD in Bulgaria, Denmark, Estonia, Germany, Finland, Norway, Ireland, Latvia, Lithuania, Sweden or Iceland in the same reporting period.
The divergence in sanction implementation is highlighted by the figure that Germany represented the largest segment (33%) of net assets of the EU AIF industry in Q4 2022, followed by France (19%), Luxembourg (15%), Ireland (13%) and the Netherlands (11%).
While France represented the second largest segment of net assets of the EU AIF industry and issued the most number of penalties, Germany represented the largest segment of the industry, yet issued no sanctions.
These findings highlight a lack of harmonisation among EU regulators, with a need to further unify sanction enforcement efforts.
Mark Shaw, partner at Pinsent Masons, commented on the reported divergence between Member States: “There are different approaches to regulation. It seems that Germany, Ireland and, to a lesser extent, Luxembourg, are using enhanced supervisory measures instead of sanctions.”
On the other hand, Shaw clarified that although France tops the sanction charts, fund managers tend not to be dissuaded from domiciling funds there and the number of fines issued overall remains relatively low.
ESMA concludes in the report that there is an ongoing need to foster supervisory convergence and the application of AIFMD across the EU, suggesting its desire to see more sanctions being enforced in the cases of significant regulatory breaches.
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