French investment banks face growing pressure to strengthen conflicts of interest frameworks as the Autorité des marchés financiers (AMF) raises the bar on compliance expectations, according to RegTech firm MCO (MyComplianceOffice).
MCO highlights that managing conflicts of interest and tracking employee conduct has become increasingly critical for French investment banks, with regulators moving well beyond paper-based policy checks towards demanding demonstrable, day-to-day controls.
Recent SPOT (Supervision des Pratiques Opérationnelle et Thématique) inspections by the AMF have underscored that firms must show their frameworks actually function in practice. Inspectors have focused closely on how institutions identify, monitor and act on risk, scrutinising the organisation and effectiveness of compliance and internal control functions across the board.
According to MCO, AMF findings make clear that structured oversight must now be embedded in governance, with compliance functions properly resourced and carrying clear accountability. Continuous surveillance is expected rather than periodic reviews, and firms must be able to produce documented evidence of escalation procedures and outcomes. This is particularly pressing for personal account dealing, where the AMF has identified persistent weaknesses and expects active monitoring frameworks, not simply a register of trades.
The AFEI-FBF Code sits at the heart of the conflict management landscape for French investment banks, credit institutions and investment service providers. Developed in alignment with AMF rules and MiFID II, it sets practical standards covering both financial analysts and operational teams. MCO notes that the code obliges firms to embed formal governance frameworks across all business lines, particularly where research, trading and distribution activities intersect, and to apply controls proportionate to the scale and complexity of their operations.
The French Monetary and Financial Code (Code monétaire et financier, CMF) reinforces these obligations, requiring investment service providers to identify, prevent, manage and, where necessary, disclose conflicts through auditable organisational measures. Crucially, MCO stresses that over-reliance on disclosure is itself considered a deficiency by the AMF. Prevention and management must come first.
MCO outlines several core compliance controls French investment banks are expected to maintain: regularly updated conflict of interest registers; information barriers restricting sensitive data flows across business lines; inducement policies covering monetary and non-monetary benefits; pre-clearance and post-trade surveillance for personal transactions; and transparent client disclosure where residual conflicts cannot be fully mitigated.
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