Feedback from regulators across the EU has found that some fund managers’ compliance and internal audit functions could be sidelined, under-resourced, and lack independence. Authorities also found that there could be “significant” differences in the quality of these control functions depending on the size of the organization and the jurisdiction it may be based in.
In May, the European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, published the results of its 2025 common supervisory action (CSA) which reviewed the compliance and internal audit functions of fund managers, carried out with the participation of the national competent authorities (NCAs) of all European Economic Area (EEA) members (essentially, all 27 EU member states, plus Iceland, Norway and Liechtenstein).
