Commission Directive 2010/43/EU

In force

This text since 1 Aug 2022law://eu/dir/2010/43/art_10@2026-11-12

Contents

Article 10Permanent compliance function#

1.Member States shall ensure that management companies establish, implement and maintain adequate policies and procedures designed to detect any risk of failure by the management company to comply with its obligations under Directive 2009/65/EC, as well as the associated risks, and put in place adequate measures and procedures designed to minimise such risk and to enable the competent authorities to exercise their powers effectively under that Directive.Member States shall ensure that management companies take into account the nature, scale and complexity of the business of the company, and the nature and range of services and activities undertaken in the course of that business.

2.Member States shall require management companies to establish and maintain a permanent and effective compliance function which operates independently and which has the following responsibilities:

(a)to monitor and, on a regular basis, to assess the adequacy and effectiveness of the measures, policies and procedures put in place in accordance with paragraph 1, and the actions taken to address any deficiencies in the management company’s compliance with its obligations;

(b)to advise and assist the relevant persons responsible for carrying out services and activities to comply with the management company’s obligations under Directive 2009/65/EC.

3.In order to enable the compliance function referred to in paragraph 2 to discharge its responsibilities properly and independently, management companies shall ensure that the following conditions are satisfied:

(a)the compliance function must have the necessary authority, resources, expertise and access to all relevant information;

(b)a compliance officer must be appointed and must be responsible for the compliance function and for any reporting on a frequent basis, and at least annually, to the senior management on matters of compliance, indicating in particular whether the appropriate remedial measures have been taken in the event of any deficiencies;

(c)the relevant persons involved in the compliance function must not be involved in the performance of services or activities they monitor;

(d)the method of determining the remuneration of the relevant persons involved in the compliance function must not compromise their objectivity and must not be likely to do so.

However, a management company shall not be required to comply with point (c) or point (d) of the first subparagraph where it is able to demonstrate that in view of the nature, scale and complexity of its business, and the nature and range of its services and activities, that requirement is not proportionate and that its compliance function continues to be effective.

Source: EUR-Lex, © European Union, 1998-2026. Reuse authorised under Decision 2011/833/EU.

Key facts

Type: Directive · Commission Directive 2010/43/EU · EEA relevant
Adopted: 1 Jul 2010
In force: 30 Jul 2010
Text current to: 1 Aug 2022
Made by: European Commission
Official: EUR-Lex 32010L0043 · ELI

Topics

approval approximation of laws business management financial legislation financial management investment company market access merger right of establishment securities Freedom of establishment Free movement of capital

History · 1 version

1 Aug 2022Reading

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Cited by 4: this act; Commission Delegated Directive (EU) 2021/1270 (UCITS)4 provisions; Commission Directive 2010/42/EU; Commission Regulation (EU) No 583/20102 provisions

Defined terms · 13

Show every defined term

board of directors
means the board of directors of the management company;
client
means any natural or legal person, or any other undertaking including a UCITS, to whom a management company provides a service of collective portfolio management or services pursuant to Article 6(3) of Directive 2009/65/EC;
counterparty risk
means the risk of loss for the UCITS resulting from the fact that the counterparty to a transaction may default on its obligations prior to the final settlement of the transaction’s cash flow;
execution venue
shall mean a regulated market as referred to under Article 4(1)(14) of Directive 2004/39/EC, a multilateral trading facility as referred to in Article 4(1)(15) of that Directive, a systematic internaliser as referred to in Article 4(1)(7) of that Directive, or a market maker or other liquidity provider or an entity that performs a similar function in a third country to the functions performed by any of the foregoing.
liquidity risk
means the risk that a position in the UCITS portfolio cannot be sold, liquidated or closed at limited cost in an adequately short time frame and that the ability of the UCITS to comply at any time with Article 84(1) of Directive 2009/65/EC is thereby compromised;
market risk
means the risk of loss for the UCITS resulting from fluctuation in the market value of positions in the UCITS’ portfolio attributable to changes in market variables, such as interest rates, foreign exchange rates, equity and commodity prices or an issuer’s credit worthiness;
operational risk
means the risk of loss for the UCITS resulting from inadequate internal processes and failures in relation to people and systems of the management company or from external events, and includes legal and documentation risk and risk resulting from the trading, settlement and valuation procedures operated on behalf of the UCITS;
senior management
means the person or persons who effectively conduct the business of a management company in accordance with Article 7(1)(b) of Directive 2009/65/EC;
supervisory function
means the relevant persons or body or bodies responsible for the supervision of its senior management and for the assessment and periodical review of the adequacy and effectiveness of the risk management process and of the policies, arrangements and procedures put in place to comply with the obligations under Directive 2009/65/EC;
sustainability factors
means sustainability factors as defined in Article 2, point (24), of Regulation (EU) 2019/2088.
sustainability risk
means sustainability risk as defined in Article 2, point (22), of Regulation (EU) 2019/2088 of the European Parliament and of the Council;
unit-holder
means any natural or legal person holding one or more units in a UCITS;
value at risk
shall mean a measure of the maximum expected loss at a given confidence level over a specific time period.

Defined terms · 13

Show every defined term

board of directors
means the board of directors of the management company;
client
means any natural or legal person, or any other undertaking including a UCITS, to whom a management company provides a service of collective portfolio management or services pursuant to Article 6(3) of Directive 2009/65/EC;
counterparty risk
means the risk of loss for the UCITS resulting from the fact that the counterparty to a transaction may default on its obligations prior to the final settlement of the transaction’s cash flow;
execution venue
shall mean a regulated market as referred to under Article 4(1)(14) of Directive 2004/39/EC, a multilateral trading facility as referred to in Article 4(1)(15) of that Directive, a systematic internaliser as referred to in Article 4(1)(7) of that Directive, or a market maker or other liquidity provider or an entity that performs a similar function in a third country to the functions performed by any of the foregoing.
liquidity risk
means the risk that a position in the UCITS portfolio cannot be sold, liquidated or closed at limited cost in an adequately short time frame and that the ability of the UCITS to comply at any time with Article 84(1) of Directive 2009/65/EC is thereby compromised;
market risk
means the risk of loss for the UCITS resulting from fluctuation in the market value of positions in the UCITS’ portfolio attributable to changes in market variables, such as interest rates, foreign exchange rates, equity and commodity prices or an issuer’s credit worthiness;
operational risk
means the risk of loss for the UCITS resulting from inadequate internal processes and failures in relation to people and systems of the management company or from external events, and includes legal and documentation risk and risk resulting from the trading, settlement and valuation procedures operated on behalf of the UCITS;
senior management
means the person or persons who effectively conduct the business of a management company in accordance with Article 7(1)(b) of Directive 2009/65/EC;
supervisory function
means the relevant persons or body or bodies responsible for the supervision of its senior management and for the assessment and periodical review of the adequacy and effectiveness of the risk management process and of the policies, arrangements and procedures put in place to comply with the obligations under Directive 2009/65/EC;
sustainability factors
means sustainability factors as defined in Article 2, point (24), of Regulation (EU) 2019/2088.
sustainability risk
means sustainability risk as defined in Article 2, point (22), of Regulation (EU) 2019/2088 of the European Parliament and of the Council;
unit-holder
means any natural or legal person holding one or more units in a UCITS;
value at risk
shall mean a measure of the maximum expected loss at a given confidence level over a specific time period.