Investment Funds Update Europe: Legal and regulatory updates for the funds industry from the key asset management centres and primary European fund domiciles - Issue 1, 2018: France

Dechert LLP

Dechert LLP

Entry into force of MiFID II

The Directive 2014/65/EU on Markets in Financial Instruments (MiFID II) entered into force in France on 3 January 2018. Within the framework, the French legal framework has been updated over the last year to implement MiFID II under French law. As part of this process, the Autorité des Marchés Financiers (the AMF, the French financial markets regulator) has published several guides aimed at professionals. On 17 January, the AMF updated its MiFID II guide on the funding of research. The update contains two changes:

  • Clarification as to how research produced within the framework of a financial instrument issuance can be seen as constituting a non-monetary benefit.
  • Modifications related to the Q&A published by the European Commission on 26 October 2017.

Visit the AMF Website to read more.

Creation of the Organisme de Financement Specialisé

The Ordinance n° 2017-1432 dated 4 October 2017 entered into force on 4 January 2018. This ordinance introduced a new legal framework for loan origination by French funds, among other by introducing a new French vehicle entitled the “organisme de financement spécialisé”, which is authorized to originate loans directly in France, as the fonds professionnel spécialisé and the fonds professionnel de capital investissement.

The ordinance also introduces several new exemptions to the French banking monopoly (including by authorizing foreign funds to acquire unmatured receivables in France from a duly authorized fronting entity or by making the Dailly mechanism available to professional funds).

The legal regime for the OFS should be finalized in the coming weeks with the publication of an upcoming decree.

Update of AMF publications

The AMF published an update to its Position-Recommendation n° 2011-24 (which covers drafting of marketing material for funds). Pursuant to this change, the AMF recommends that, when providing to investors information on its ESG principles on its website as required by French regulations, a French management company provides such information on a comprehensive single document, which should be drafted in French if such management company targets French retail investors.

As a reminder, French management companies are required to publish information related to their ESG Principles, which shall provide information on (i) the management company (among other, how such entity takes into account the ESH principles, how it will inform on the application of such principles, whether it has adhered to a specific code of ethics…) and (ii) its investment policy (mainly how such principles will be taken into account in the investment activity of the entity).

Visit the AMF Website to read more.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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