ESMA Launches CSA On Compliance And Internal Audit Functions

On 14 February 2025, the European Securities and Markets Authority ("ESMA") launched a new Common Supervisory Action ("CSA") focused on Compliance and Internal Audit Functions within fund management companies. See ESMA's notice here – ESMA launches a Common Supervisory Action with NCAs on Compliance and Internal Audit Functions.

ESMA's CSA will focus on assessing the extent to which UCITS management companies and Alternative Investment Fund Managers ("AIFMs") have established effective compliance and internal audit functions with the adequate staffing, authority, knowledge, and expertise to perform their duties under the AIFM and UCITS Directives. ESMA notes that compliance and internal audit functions are designed to ensure that the internal control mechanisms to monitor, identify, measure, and mitigate any possible risks of non-compliance with the applicable rules are in place.