On 22 December 2025, France’s Autorité des marchés financiers (AMF) announced that its Enforcement Committee had sanctioned CACEIS Bank for breaches of its professional obligations as a UCITS depositary, imposing a €3.5 million fine and issuing a warning.
The decision was adopted on 17 December 2025 and relates to CACEIS Bank’s role as depositary for seven French-law UCITS that were managed by H2O AM LLP, with the management later transferred to H2O AM Europe (together referred to here as “H2O,” consistent with the AMF’s description).
This enforcement action followed a notification of objections by the AMF Board. The Enforcement Committee upheld most of the objections raised against CACEIS Bank, concluding that the depositary did not meet required standards in key areas of oversight and control.
What the AMF identified as the core failings
The Enforcement Committee’s findings centre on whether CACEIS Bank performed sufficiently robust checks in fulfilling its depositary duties. In particular, the Committee found that CACEIS Bank did not carry out sufficient checks on the systems used by the asset management company to monitor compliance with rules applicable to the UCITS.
One area highlighted was the monitoring of investment ratios applicable to the funds. The Committee considered that CACEIS Bank did not sufficiently check the systems put in place by the management company to ensure those ratios were properly monitored.
A second area concerned the valuation of unlisted securities acquired by the funds. The Committee found that CACEIS Bank did not carry out sufficient checks on the systems used to value these unlisted instruments, indicating shortcomings in how valuation controls were overseen.
Legality checks and compliance with fund documentation
Beyond system-level checks, the Enforcement Committee also found that CACEIS Bank did not duly check the legality of H2O’s investment decisions in relation to constraints set out in the funds’ prospectuses or regulations.
The AMF specifically referenced constraints connected to the rating of debt securities, the nature of derivatives acquired, and compliance with a concentration control ratio for bonds. The Committee highlighted the rule that a UCITS may not hold more than 10% of the debt securities of a single issuer, and it found that CACEIS Bank did not duly check compliance with this ratio.
These findings collectively reflect the Committee’s view that the depositary’s responsibilities include effective oversight of both operational controls (such as ratio monitoring and valuation systems) and compliance with investment constraints arising from the funds’ governing documentation.
The sanctions imposed
As a result of the breaches identified, the Enforcement Committee imposed a €3.5 million financial penalty on CACEIS Bank and issued a warning.
The AMF also indicated that an appeal may be lodged against the Enforcement Committee’s decision.
Why this decision is significant for UCITS depositary oversight
This decision is significant because it reinforces the AMF’s expectations regarding the depositary function within the UCITS framework. The Enforcement Committee’s findings focus on whether checks were sufficiently robust—both in reviewing the systems used by the management company and in verifying compliance with prospectus- and regulation-based investment constraints.
By addressing investment ratio monitoring, valuation of unlisted securities, and legality checks tied to prospectus constraints (including the single-issuer concentration limit for debt securities), the decision underlines that depositary obligations are treated as substantive controls with clear supervisory expectations.
Key compliance themes highlighted by the AMF action
The decision places particular emphasis on the depositary’s role in assessing the reliability of the management company’s systems for monitoring investment ratios. It also highlights the importance of oversight in relation to valuation processes, specifically where unlisted securities are involved.
In addition, the enforcement findings underscore the depositary’s duty to check the legality of investment decisions against the constraints contained in fund documentation, including constraints linked to debt security ratings, derivative characteristics, and the issuer concentration ratio for bonds.
In summary, the AMF’s Enforcement Committee sanctioned CACEIS Bank with a €3.5 million fine and a warning in connection with depositary services provided to seven French-law UCITS managed by H2O, citing insufficient checks on systems for investment ratio monitoring and valuation of unlisted securities, as well as inadequate legality checks against prospectus and regulatory constraints, including the UCITS concentration limit on debt securities of a single issuer.
