ESMA identifies areas for further supervisory convergence on compliance and internal audit in the funds sector

The EU-wide review found that most fund managers comply with key requirements under the AIFMD and UCITS framework. At the same time, the CSA identified governance weaknesses, particularly in the independence of control functions, the quality and implementation of internal policies, and the way senior management and boards exercise oversight.

While most entities had relevant policies and procedures in place, national competent authorities (NCAs) observed significant differences in their quality and practical implementation, notably depending on the size, nature and complexity of market participants concerned.

The report also sets out examples of good and poor practices identified across the compliance and internal audit functions, highlighting where controls were effective and where further strengthening is needed.

The CSA was conducted under a common assessment framework. NCAs carried out supervisory activities throughout 2025, using desk-based reviews and, where appropriate, on-site inspections. 

Next steps 

While acknowledging the overall positive outcome of the CSA, ESMA encourages NCAs to follow up on the breaches and vulnerabilities identified, to better understand their root causes and to ensure that effective remedial actions are implemented in a timely manner. ESMA will continue to promote exchanges among NCAs on this topic, including through follow-up supervisory actions, to further enhancing supervisory convergence across the EU funds sector.

Further information:

Ana Dilaverakis

Communications Officer
press@esma.europa.eu