ELTIF Regulations in France
The 2015 Amending Finance Law (law n° 2015-1786) included several provisions modifying the French Monetary and Financial Code (Code monétaire et financier) in order to implement under French law the possibility for certain professional investment funds to grant loans according to the ELTIF regulation (Regulation (EU) 2015/760 of the European Parliament and of the Council of 29 April 2015 on European long-term investment funds). This constitutes a new breach in the French banking monopoly, allowing professional venture capital funds (fonds professionnel de capital investissement), professional specialized funds (fonds professionnels spécialisés) and securitization funds (organismes de titrisation) to grant loans. These provisions, in effect as from 1 January 2016, will be completed by a decree which remains outstanding.
Breach of Management Companies’ Obligation to Define an Allocation of Orders Procedure
In the AMF’s decision SAN-2015-21 dated 9 December 2015, the AMF Commission des sanctions (the AMF’s Enforcement Committee) fined a Management Company for the breach of its professional obligations. On the basis of Articles 313-1 and 314-66 IV of the AMF General Regulation (Règlement Général), the Commission des Sanctions recalled that investment services French Management Companies shall “define the planned allocation of the orders they give beforehand”. In other words, in order to treat their clients fairly, Management Companies must ensure that the contemplated orders are defined prior to the effective transmission of such orders. Further, the Commission des Sanctions noted that such entities are required to record transactions in order to allow, in particular, the scrutiny of their professional obligations by the AMF. The Management Company was fined €400,000 for breaching its professional obligations.
Fonds Commun de Placement dans l’innovation (FCPIs) and Fonds d’investissement de Proximité (FIPs)
The 2015 Amending Finance Law also included several provisions with respect to, among others, French investments in tax incentive funds, in order to make FCPIs and FIPs compliant with the Regulation (EU) n° 651/2014. Please note that Olivier Dumas will host a presentation on these matters on 22 January 2016 at the AFIC.
Update of AMF Doctrine
The Autorité des marchés financier (the “AMF”) has updated several instructions in December, including modifications on the following provisions of its doctrine, including among others:
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The possibility for a Management Company to resume publishing semi-annual reports for UCITS and FIVG (before this update, as long as a management company had decided to publish a quarterly reports, it was unable to modify its position): see articles 32 of AMF Instructions n° 2011-19 and 2011-20.
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Modification of the information relating to investment in other funds quotas for UCITS and FIVG (three quotas to report in the prospectus over than five quotas before): see articles 31-3 of AMF Instructions ° 2011-19 and 2011-20.
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Client Mediation for Management Companies
The revised wording of the French Code de la consummation has implemented several provisions on mediation for French clients. Though the Management Companies which already applied the AMF Instruction n° 2012-07 shall only amend their procedures slightly, the Association Française de la Gestion Financière (the “AFG”) has published a note on the matter.