Financial supervisor CSSF has imposed two fines totalling 1.015 million euro on Fuchs & Associates after an on-site inspection found that the Luxembourg management company did not comply with laws for internal controls and EU requirements under the Mifid rules.
CSSF visited the Luxembourg offices of Fuchs in May and found that the firm’s internal governance arrangements, “notably to the responsibilities of the board of directors and the authorised management,” and the rules and professional duties of the internal control functions were not in line with applicable law.
The supervisor also concluded that Fuchs did not meet the requirements under the EU Markets in Financial Instruments Directive, known as Mifid. “More precisely to the organisation in relation to the provision of portfolio management services, the product governance framework, the assessment of the suitability of investment services, the reporting of significant losses, the management of conflicts of interest, the follow-up of personal transactions and the management of benefits received.”
Fines have been paid
In a statement responding to the CSSF announcement, Fuchs said that it “continues to strengthen its internal control organisation in terms of both IT and human resources, in line with the various regulatory obligations” and that it has “paid the fines set, thus bringing this procedure to an end”.
“The two visits did not reveal any illegal activity,” Fuchs said in its statement. “The weaknesses identified during the on-site inspections in 2021 immediately led to the establishment and communication of a remediation plan, which is currently being implemented in full cooperation with all stakeholders. Fuchs & Associates is therefore continuing to strengthen its internal control organisation in accordance with the points raised by the regulator.”
Fuchs said that, as a management company that has been present in Luxembourg for more than twenty years, it “respects all the rules of conduct based on important ethical values in order to maintain its excellent reputation, as well as that of the country and its financial centre”.