In the wake of the wave of modernization and transparency of the French economic life triggered by the so-called “Sapin II” Law, in particular as regards the financing of the economy, Ordinance n°2017-1432 of October 4, 2017 reshapes the legal framework for asset management and debt financing.
The objective is to respond to businesses’ needs for a more diverse set of funding sources, while ensuring investor protection.
In the wake of the large-scale program launched in France in 2013 to simplify the regulatory framework applicable to businesses, Decree n°2017-932 of May 10, 2017 introducing various simplification measures for businesses has streamlined the formalities that foreign companies must carry out to invest in France.
This simplification must not, however, mask the French government’s intention to maintain an effective screening of foreign investments in so-called sensitive sectors deemed crucial to France’s national interests in terms of public order, public security and national defense.
Ordinance n°2017-748 of May 4, 2017 adopted in furtherance of the so-called “Sapin II” Law on transparency, fight against corruption and modernization of the economy, adds a new element to the concept of Security Agent in the context of syndicated loans, thereby offering banks and other institutions an efficient and secure device comparable to what is known, in particular in Anglo-Saxon countries, as the “Security Trustee”.
This widely welcomed reform should contribute to improve the competitiveness of the French finance industry with respect to syndicated financing.
Countdown to Brexit started on March 29, 2017, date on which Theresa May officially notified the Chair of the European Council of the United Kingdom's intention to leave the EU. This notification launches two years of tough negotiations at the end of which the United Kingdom and the European Union must agree on the terms and conditions of UK’s withdrawal, unless this timeline is extended by unanimous agreement from all EU Member States.
The timetable for negotiations coincides with the entry into force in 2019 of a series of financial rules, one of the most important in the banking and financial sector being the Directive on markets in financial instruments, known as the MiFID Directive. The implementation of this Directive is essential to allow banks and investment firms to operate within the European Union.
In a decision dated January 31, 2017, the Commercial Chamber of the Cour de Cassation (French Supreme Court) held that “unless otherwise agreed upon between the parties, the first demand guarantee, that does not follow the guaranteed obligation, is not transferred in case of a split-up”.
This position has already triggered many comments and conflicting views. It deserves special attention given that, in particular, first demand guarantees are an essential issue for businesses and supposed to ensure legal certainty for their beneficiaries.
In a decision dated November 29, 2016, the Commercial Chamber of the Cour de Cassation (French Supreme Court) further specified the conditions for the implementation of Article L.631-1§1 of the French Commercial Code that addresses the rules according to which credit reserves or moratoria granted to a debtor company should be taken into account in the assessment of said debtor company’s possible state of cessation of payments.
This decision provides the opportunity to recall applicable rules and to stress that particular attention should be paid, in particular within corporate groups, to advances made to financially distressed group entities.
Adopted by the French Parliament on November 8, 2016, the Law on transparency, the fight against corruption and the modernization of the economy, commonly referred to as the “Sapin II Law” (the “Law”) “is intended [according to the French Government], more than 20 years after the Law no. 93- 122 of January 29, 1993 on the prevention of corruption and the transparency of business life and public procedures, to support further progress with regard to transparency and modernization of business life and the relationships between economic players and public decision-makers”.
This article focuses on measures that impact French corporate law.
Law n°2011-103 of January 27, 2011 on balanced representation of men and women on boards of directors and supervisory boards and on gender equality in the workplace, also known as the “Copé-Zimmermann” Law, provides for the phased introduction of a greater gender diversity in boards of directors of large French companies.
The last stage of implementation of this Law will start on January 1, 2017. This provides an opportunity to make a status report on this legislation that has already inspired many other countries.
Ordinance n°2016-131 of February 10, 2016 for the reform of contract law, the general regime of obligations and proof of obligations (the “Ordinance”) came into force on October 1, 2016.
One of the innovative provisions introduced by the reform is codified in new Article 1161 of the French Civil Code under which a so-called “contract with oneself” which creates a conflict of interest in representation is void.
The implementation of this provision will raise difficulties, in particular with respect to its articulation with other rules set forth in the French Commercial Code and that apply, in particular, within corporate groups.
n today’s world, knowledge is the key to innovation and success. For companies, the protection of trade secrets has become a major challenge as the unlawful disclosure of information concerning a company is likely to undermine such company’s ability to compete in a market where competition has dramatically increased.
French law, as it currently stands, only partially protects business information and savoir-faire of companies, despites the high commercial value that such information may have. The expression “trade secrets” is, however, frequently referred to in French legal and regulatory texts (it is mentioned in no less than 150 codified articles!) and by judicial and administrative courts, but it is neither defined nor regulated by a specific legal framework.
In the absence of any specific text, trade secrets are currently protected by a series of scattered civil and criminal law provisions (1).
EU Directive 2016/943 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure (the “Directive”) addresses this issue. It was adopted by the European Parliament and the European Council on June 8, 2016 and must be transposed by Member States into national law by June 9, 2018 (Article 18 of the Directive). The question facing law practitioners is now to identify how the protection of trade secrets will henceforth be ensured (2).
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