ESMA, the EU's financial markets regulator, released findings from its 2025 Common Supervisory Action (CSA). This CSA focused on fund managers' compliance and internal audit functions, involving all EU and EEA national supervisors. The review revealed overall compliance with key AIFMD and UCITS requirements among fund managers. However, the CSA unearthed governance weaknesses within the sector. These weaknesses included issues regarding the independence of control functions. The quality and implementation of internal policies also varied significantly. Senior management and boards' oversight practices were also scrutinized. The report provides examples of both effective and deficient practices observed. The CSA employed a common assessment framework, utilizing desk reviews and on-site inspections. ESMA urges NCAs to address identified breaches and vulnerabilities promptly with remedial actions. ESMA will continue promoting exchanges to enhance supervisory convergence within the EU funds sector.