AMF Consultations - Corporate Finance Advice and Intermediation in Miscellaneous Assets

The Autorité des Marchés Financiers (the “AMF”, the French financial markets authority) has recently launched two public consultations.

The first consultation relates to the provision of corporate finance advice (or M&A advisory) and whether such provision of service constitutes a regulated activity or not. In its consultation, the AMF notes that this service is provided by either regulated or unregulated entities. As a result, the AMF consults to determine whether such activity should be regulated in the future (i.e., does it constitute investment advice).

The second consultation relates to the French system of intermediation in miscellaneous assets. As a reminder, this legal regime applies to persons who (i) directly or indirectly, invite third parties to subscribed to life annuities or to acquire title to movable or immovable property where the acquirers do not perform the management thereof themselves or where the contract offers a buy-back or exchange option with revaluation of the capital invested, (ii) collects funds to that effect and (iii) is in charge of managing said property. Pursuant to the Sapin 2 Law, the AMF shall now do a prior control on proposal investments (whereas the control was a posteriori until now). The AMF therefore consults on the proposed modifications of its General Regulations reflecting this change.

Read the AMF Public Consultation on corporate finance advice (in English)

Read the AMF Public Consultation on intermediation in miscellaneous assets (in French) 

AMF General Regulations Update and AMF Position - Marketing Communication Ban for Certain Products

Pursuant to the Sapin II Law, an Arrêté was published on 22 December 2016. This Arrêté inserted a new article, as set out in L533-12-7, in the French Monetary and Financial Code, which bans electronic advertising to retail investors of the riskiest and highly speculative products that are not admitted for trading on a regulated market or on multilateral trading facility. Following this Arrêté and in view of the Sapin II law, the General Regulation of the AMF (the “GRAMF”) was amended accordingly by inserting a new article to determine which specific financial contracts could not be advertised to non-professional investors. The new article 314-31-1 of the GRAMF lists the three categories of financial contracts that cannot be marketed to the public. Further to the update of the GRAMF, the AMF published on 10 January 2017 a position in the form of Questions & Answers providing specific details on the implementation of article 314-31-1.

Read the Arrêté (in French only)

Read the AMF position (in French only)

Read the AMF news release (in French)

Read the AMF news release (in English)

AFG - Guide on the Governance of Management Companies

The Association Française de la Gestion Financière (the French Asset Management Association, the “AFG”) published in January 2017 a guide of governance of French asset management companies which establishes the best practices for governance of such entities. The AFG stated that “it lists the good practices making it possible to establish a framework fulfilling the requirements of performance and ethics of the French asset management industry, thus contributing to the reinforcement of its international competitiveness”. Management companies are invited to implement the best practices described. Otherwise, they are encouraged to directly apply the “comply or explain” principle and to provide reasons leading to the non-application of the good standard practices recommended. The guide details, among others, the following principles:

• the institutions of governance of management companies;
• deontology principles;
• control of risks; and
• equal treatment of investors.

Read the AFG guide of governance of French asset management companies (in French only)

AMF Positions - Compensation Policies of Management Companies

Pursuant to the newly established Position n° 2016-14 and the update of the Position n° 2013-11, the AMF declared to ESMA on 5 December 2016 that the AMF will comply, as from 1 January 2017, with (i) the ESMA guidelines on sound remuneration policies for UCITS management companies (ESMA/2016/575) and (ii) the ESMA updated guidelines on sound remuneration policies for managers of AIFs (ESMA/2016/579), and therefore incorporate the guidelines aforesaid in its regulatory practices. With respect to UCITS management companies, the remuneration policy shall be established before the end of the first quarter of 2017 and applicable for the bonuses paid in 2018 on the basis of 2017.

Read the AMF position N° 2016-14 (in French only)

Read the AMF position N° 2013-11 (in French only)