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.
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 January 26, 2016, the Commercial Chamber of the Cour de Cassation (French Supreme Court) provided clarification on the conditions in which Article L.341-4 of the French Consumer Code should be applied. Specifically, it ruled that “the shares and the current account receivable held by the guarantor in the company that is the beneficiary of the guarantee must be taken into account in the assessment of the guarantor’s assets and income at the time he/she delivered the guarantee”.
“The longest journey always starts with one step” used to say François de la Rochefoucauld. On December 12, 2015, the COP21, also known as the 2015 Paris Climate Conference, ended with an historical agreement that provides fresh impetus in the fight against global warming. For the business community, this agreement is primarily a signal for continuing investments in clean solutions and technologies.
As such, the COP21 highlighted the importance of sustainable financing and the development of a tool designed to support energy transition, i.e. green bonds.
For several years, the diversification of funding sources has become a crucial challenge for French and European mid-market companies.
In this context, private placements in the form of bonds or loans, known as the “Euro-PP” market, have grown significantly in France and in Europe, thereby offering companies an alternative to bank funding.
Crowdfunding, also called financement participatif in France, is a new mode of funding “by the crowd” that recently emerged in response to banks’ unwillingness to lend money. As its name suggests, crowdfunding enables anyone to contribute to the development of Small and Medium-sized Businesses, so dear to our government, by providing funds in the form of loans, donations or subscription of securities, through online platforms designed to connect people wishing to initiate a specific project with people willing to contribute to the funding of that project.
Crowdfunding, as a fabulous communications tool that is increasingly used, especially through the rise of social networks, needed to be more strictly regulated. This has now been done.
Ordinance no. 2010-76 of January 21, 2010 established a new administrative control authority for the banking and insurance industries, the Autorité de contrôle prudentiel (Prudential Control Authority or hereinafter “ACP”). The ACP was formed through the merger of existing licensing and supervisory authorities that supervised the bank and insurance industries (i.e. the Commission Bancaire (Banking Commission), the Autorité de Contrôle des Assurances et des Mutuelles (Insurance and Mutual Insurance Societies Supervisory Authority), the Comité des Etablissements de Crédit et des Entreprises d'Investissement (Credit Institutions and Investment Firms Committee) and the Comité des Entreprises d'Assurance (Insurance Companies Committee).
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