ESMA flags supervisory gaps in fund compliance and internal audit
ESMA published 2025 Common Supervisory Action results identifying areas needing further convergence on compliance and internal audit in fund managers.
The EU-wide review across all national supervisors highlights weaknesses in second and third line functions of fund managers. Expect heightened supervisory scrutiny of compliance independence, resourcing, and internal audit coverage in UCITS and AIFM entities.
Signals near-term supervisory focus on governance functions across EU fund management activities.
Action Required
Benchmark fund manager compliance and internal audit arrangements against ESMA CSA findings and remediate identified weaknesses.
CSA findings typically drive national supervisor inspection priorities and enforcement themes over the following 12 months.
Review compliance and internal audit function adequacy, independence, and resourcing in EU fund management subsidiaries against ESMA CSA observations.
“ESMA published the results of its 2025 Common Supervisory Action (CSA) on the compliance and internal audit functions of fund managers, carried out with the participation of all EU and EEA national supervisors.”