The sanction procedure of the Autorité des marchés financiers (AMF) is a major issue for professionals in the financial sector. The AMF has extensive powers to ensure that markets operate smoothly, that savings are protected and that investors are properly informed, whether they are natural persons or legal entities. Understanding the various stages of this procedure is therefore essential if you are to anticipate risks and defend your interests. Our firm offers you a detailed analysis of this process, from the preliminary investigation phase through to the imposition of sanctions, including the rights of those implicated and the remedies available. For an overview of this subject, please consult our reference guide to the AMF's sanctioning powers.
Fundamental principles and fair trial guarantees before the AMF
The Autorité des marchés financiers (AMF) is an independent public authority tasked with regulating and sanctioning financial market participants. Historically, the legal framework governing its powers has evolved considerably, notably under the decisive influence of the case law of the European Court of Human Rights (ECHR). This development has led to the gradual application of the guarantees of Article 6 of the ECHR to proceedings conducted by the AMF, qualifying them as "criminal matters" within the meaning of the Convention, due to the repressive nature of the sanctions that it can impose. This has imposed strict requirements in terms of impartiality and respect for the rights of the defence.
The Financial Security Act of 1 August 2003 marked a major turning point by establishing a watertight functional separation between the AMF Board, which is responsible for regulation and initiating sanction proceedings, and the Enforcement Committee, which has sole power to impose sanctions. This separation, which was paved by the "Oury" rulings of the Court of Cassation, ensures objective impartiality by preventing the same body from combining the functions of investigation, prosecution and judgment. In addition, the sanction procedure, whether administrative or disciplinary, has been unified, ensuring a uniform level of procedural guarantees for all those being prosecuted. For a precise distinction between the different types of sanction, it is useful to refer to the article on the AMF administrative and disciplinary sanctions.
Objective impartiality: a central requirement
The principle of objective impartiality is a cornerstone of a fair trial, and it has been scrupulously integrated into the organisation of the AMF. In practical terms, this impartiality is ensured by the strict separation of functions. The AMF Board, as the regulator and prosecutor, does not take part in the adjudication process. It is up to the Enforcement Committee, an administrative court, to make decisions. sui generisThis institutional structure is designed to prevent any form of prejudice and to ensure that the final decision is taken by a body that has not been involved in the investigation or grievance notification phase. This institutional architecture is designed to prevent any form of prejudice and to ensure that the final decision is taken by a body that has not been involved in the investigation or grievance notification phase.
The appointment of an independent rapporteur, who is a member of the Enforcement Committee but does not take part in the deliberations, and the possibility of challenging a member of the Committee if there are serious doubts about his or her impartiality, are additional mechanisms that reinforce this requirement. Respect for impartiality is not just a matter of form; it also determines the legality of the procedure and the validity of the sanctions imposed, as the case law of the Conseil d'Etat and the Cour de cassation has repeatedly pointed out.
The preliminary investigation phase: investigations and powers of the investigators
Even before sanction proceedings are formally initiated, the AMF conducts investigations and inspections to detect possible breaches. This phase is crucial because it enables the AMF to gather the evidence needed to establish the facts. These investigations are initiated by the AMF's Secretary General or his or her delegate, who is responsible for the operation and coordination of the departments.
It is important to distinguish between investigation and supervision. While the purpose of an inspection is to check that regulated entities are complying with their professional obligations, an investigation focuses on specific transactions or financial instruments, with the aim of ensuring market integrity. These two types of investigation, although distinct, are conducted by authorised investigators and can potentially lead to sanction proceedings.
Mission orders and rights of interviewees
AMF investigators are vested with broad powers, but their exercise is governed by precise formalities to guarantee the rights of the persons concerned. Each investigation is initiated by a mission order signed by the Secretary General or his delegate, specifying the scope of the investigation. The persons summoned by the investigators receive a registered letter at least eight days before the hearing, mentioning the mission order by name and reminding them of their right to be assisted by counsel of their choice, a fundamental guarantee of the rights of defence. Investigations that do not require prior judicial authorisation include the disclosure of any document (on any medium), access to business premises and interviews with any person likely to provide information. In addition, the AMF may use borrowed identities to access online services and, under certain strict conditions, obtain telecommunications data, notably to investigate market abuse.
Professional secrecy and obstruction: the limits of the investigation
The AMF's investigative powers are not unlimited. Professional secrecy, which is guaranteed by Article L. 621-9-3 of the Monetary and Financial Code, is in principle unenforceable against the AMF, except where it is held by court officers (lawyers, notaries, etc.). This exception is essential to preserve the confidentiality of exchanges between clients and their lawyers. For statutory auditors, professional secrecy is waived specifically for AMF inspections and investigations.
Furthermore, any obstruction of an AMF inspection or investigation, or the provision of inaccurate information, constitutes an offence of obstruction, which is punishable under criminal law (Article L. 642-2 of the Monetary and Financial Code). There has been a major development in the case law of the French Constitutional Council. In January 2022, the Conseil constitutionnel ruled that it was unconstitutional to combine criminal proceedings with administrative penalties for the same acts of obstruction, thereby enshrining the principle of "proportionality". non bis in idem in this area. This long-awaited decision puts an end to the double penalty for this type of breach, bringing French law into line with the requirements of the ECHR. The issues at stake are also discussed in our article on the principle of "proportionality". ne bis in idem and AMF sanctions.
Investigations subject to prior judicial authorisation include home visits and seizures. These acts of inquisition, which infringe fundamental freedoms, require the prior authorisation of the liberty and custody judge (JLD) of the competent court. The request must be made by the AMF Secretary General and must state the reasons for the request. The visit is supervised by a judicial police officer and takes place within strict time limits (between 6 a.m. and 9 p.m.) in the presence of the occupant of the premises or his or her representative, who may be assisted by counsel. Records of the operations are drawn up on the spot and a copy is given to the occupant.
Precautionary measures: preventive and emergency action
During the investigation phase, the AMF may request the adoption of precautionary measures, as defined in Article L. 621-13 of the Monetary and Financial Code. These measures, which are preventive and urgent in nature, are designed to protect retail investors or ensure the smooth operation of markets without waiting for a final sanction to be handed down. They can take several forms:
- Sequestration of funds, securities or rights belonging to the defendants.
- Temporary ban on professional activity.
- Deposit of a sum of money.
These measures are ordered by the presiding judge of the court of first instance on a reasoned request from the AMF Chairman or Secretary General. In some cases, such as receivership or temporary prohibition of activity, the judge may issue an order on application, without prior hearing of the parties, on grounds of urgency. However, the person concerned retains the right to object at a later date. More specific measures have also been introduced, such as the appointment of a provisional administrator for a collective investment scheme or the requirement to suspend redemptions of collective investment scheme units in exceptional circumstances. The AMF also has the power to require the reduction of positions or the suspension of marketing of financial instruments, and can even order the suspension or dismissal of senior executives of market or investment firms. The common objective of these measures is to prevent irreparable harm even before a decision on the merits has been handed down.
Initiation of sanction proceedings: role of the college and notification of grievances
At the end of the investigation, the AMF staff prepares a written report on the findings and forwards it to the Board. It is at this stage that the Board, as the prosecuting authority, decides whether to initiate sanction proceedings. This decision is independent, and the Board may also decide to dismiss the case or refer it to other authorities (judicial, administrative or foreign) if the facts so warrant. Cases may be referred to the Board directly by the Secretary General following an internal investigation, or by the Chairman of the Autorité de contrôle prudentiel et de résolution (ACPR).
If the Board decides to initiate sanction proceedings, it notifies the persons concerned of the objections. This marks the formal opening of the adversarial procedure before the Enforcement Committee and is an essential pillar of the rights of defence.
The notification of grievances: a pillar of the rights of the defence
The statement of objections is the act whereby the AMF Board formally informs a person of the facts of which he is accused and of their legal classification. This is a vitally important stage because it sets the framework for the discussions and guarantees the rights of defence. The complaints must be formulated precisely and clearly enough to enable the accused person to fully understand the charges and organise his or her defence. The notification is sent by registered letter (or equivalent) and must be accompanied by the investigation or control report.
It must also inform the person of their right to access the entire file and to be assisted or represented by counsel of their choice. Respect for the presumption of innocence is fundamental at this stage: the complaints must not present the facts as having already been established. The Enforcement Committee will make the final decision. in fine on the merits of these complaints. The Board also appoints one of its members to challenge the accused throughout the proceedings, thus ensuring a balanced debate.
Administrative composition: a transactional alternative
Introduced by the Banking and Financial Regulation Act of 2010, administrative composition offers an alternative to traditional sanction proceedings. It is a negotiated procedure between the AMF and the respondent aimed at settling the dispute amicably and shortening the proceedings. The proposal is made by the AMF Board when the statement of complaint is issued and is open mainly to financial market professionals, their employees and agents. The defendant has one month to accept or reject the proposal.
If the person accepts, he or she undertakes to pay a sum to the Treasury, the amount of which may not exceed the ceiling of the financial penalty incurred. The agreement may also include additional undertakings. The draft agreement is negotiated by the Secretary General, validated by the Board and then submitted to the Enforcement Committee for approval. The Enforcement Committee has the power to review the agreement's legality and proportionality. Once approved, the agreement is made public. This procedure has the advantage of avoiding the hazards of long and complex litigation, although it does not constitute an admission of guilt.
Limitation periods for breaches: time limits and interruptions
The AMF's sanction proceedings are subject to limitation periods that govern the possibility of pursuing infringements. According to Article L. 621-15 of the Monetary and Financial Code, the Enforcement Committee may not be seized of facts that date back more than six years, if no investigation, observation or sanction has been carried out during that period. However, this period is extended to twelve years in the case of hidden or concealed breaches, from the date on which they came to light and could be observed by the AMF under conditions that enabled it to carry out its investigative or supervisory duties. This provision, introduced by the 2019 PACTE Act, aligns the AMF's statute of limitations with that of criminal law.
The starting point of the limitation period also varies according to the nature of the breach (instantaneous or continuous). In addition, the limitation period may be interrupted or suspended by certain procedural acts. For example, a decision by the Secretary General to open an investigation or an inspection, the notification of grievances, or a summons to a hearing are all interruptive acts that reset the clock to zero. The initiation of a mediation procedure or an administrative composition also suspends the limitation period while these alternative procedures are being carried out.
The phase before the Enforcement Committee: investigation and hearing
Once the case has been referred by the Board, the procedure enters the litigation phase before the Enforcement Committee. Through its independence and composition, the Enforcement Committee ensures that the principles of a fair trial are respected. The Chairman of the Enforcement Committee assigns the case to the full Enforcement Committee or one of its sections and appoints a rapporteur to investigate the case. The rapporteur, who is a member of the Sanctions Committee, is responsible for conducting an investigation that is "incriminating and exculpatory", which means that he or she must gather both incriminating evidence and evidence favourable to the defence. He or she may request additional investigations and interview any relevant person.
The investigation phase is followed by the hearing, which is in principle public, but may be held in camera to protect public order, national security or business secrets. During the hearing, the rapporteur presents his report, and the various parties (the representative of the Board, the defendant and his counsel) may present their observations and arguments. The rights of the defence, in particular the right to be heard and to speak last, are scrupulously respected. Finally, after the debates, the Commission deliberates in camera, without the presence of the rapporteur and the representative of the Treasury, to guarantee its impartiality. For details of how to appeal AMF sanction decisions, see our article on appeals. appeals against AMF sanctions.
The crucial role of the rapporteur and guarantees of impartiality
The rapporteur plays a central role in the investigation of cases submitted to the Enforcement Committee. It is up to the rapporteur to take all the necessary steps to enlighten the Committee, while ensuring that the investigations are fair. Although he is not an investigating judge in the criminal sense, he must guarantee the balance of the information transmitted to the Commission. To ensure impartiality, strict rules are applied to prevent conflicts of interest, and there is a recusal procedure. If a serious doubt is raised about the impartiality of a rapporteur or a member of the Commission, the person in question may request that he or she be recused, an essential guarantee for the legitimacy of the final decision.
Conduct of the hearing: public hearings and rights of the parties
The hearing before the Enforcement Committee is a key moment in the procedure, where arguments and evidence are confronted. The proceedings are open to the public as a matter of principle, to ensure transparency, but there are exceptions to protect certain legitimate interests, such as business secrets. The order of speakers is strictly defined: after the report is presented, the AMF Board representative may speak in support of the complaints, and then the respondent and its counsel present their defence. The respondent's right to speak last is a fundamental guarantee. The Chairman of the Commission chairs the proceedings and may request any hearings that he deems useful. A record of the hearing is drawn up to ensure that it can be traced.
Issuing and publicising penalties: enforceability and impact
The sanction decision is handed down by the Enforcement Committee. It must be substantiated, i.e. it must explicitly set out the facts of the case, how they are legally classified and attributed to the person concerned, and justify the sanction imposed, particularly with regard to the principle of proportionality (seriousness, duration of the breach, status of the perpetrator, gains or losses, financial situation, etc.). The decision is notified to the person penalised, the Director General of the Treasury and the AMF Chairman. In the event of misconduct by an ISP, the decision is also communicated to the Autorité de contrôle prudentiel et de résolution (ACPR).
A particularly significant aspect of AMF sanctions is their publicity. The Enforcement Committee may publish its decision in the publications or media of its choice, at the expense of the person sanctioned. The aim of such publicity is to deter and educate. However, there are safeguards: the decision to publish must be proportionate to the misconduct and the sanction. The Commission may also decide not to publish the decision, to postpone publication or to anonymise the names of the parties if publication could disrupt financial stability or an ongoing investigation, or cause serious and disproportionate harm. If the decision is appealed, the AMF must publish this information on its website. A decision annulling a sanction is also made public. The personal data contained in the published decision may not be retained for more than five years.
A lawyer's expertise: navigating AMF sanction proceedings
The AMF sanction procedure is a complex, technical mechanism with potentially far-reaching consequences for professionals. Each stage, from the preliminary investigation to the publication of the sanction, is governed by strict rules and high stakes. Navigating this legal labyrinth without expert guidance can prove perilous. A lawyer with expertise in this area is essential for a number of reasons. First of all, they can provide upstream advice to prevent breaches and audit practices. During the investigation phase, they guarantee that the rights of the defence are respected, attend hearings and ensure that investigations are fair. When it comes to the notification of grievances, it helps build a solid defence, formulate relevant observations and assess the appropriateness of an administrative composition.
Before the Enforcement Committee, the lawyer drafts the briefs, takes part in the debates and highlights the factual and legal arguments. He can also initiate the necessary appeals (stay of execution, appeal on the merits) and plead before the competent courts (Conseil d'État or Paris Court of Appeal) to contest or overturn a decision. A lawyer's expertise is not limited to litigation defence; it also includes the ability to assess risks, anticipate changes in case law and regulations, and protect clients' reputations. Our firm has a dedicated banking and finance practice ready to support you in these delicate situations. For an in-depth analysis of your situation and effective protection of your assets, don't hesitate to contact us for a consultation. specialised legal assistance for securities and guarantees.
Sources
- Fasc. 1511: AUTORITÉ DES MARCHÉS FINANCIERS. - Pouvoir de sanction, JurisClasseur Droit bancaire et financier
- Monetary and Financial Code (in particular Articles L. 621-1 et seq.)
- Commercial code
- Code of Criminal Procedure
- European Convention for the Protection of Human Rights and Fundamental Freedoms
- Regulation (EU) No 596/2014 on market abuse (MAR)
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