Decree Of September 19, 2005 Relating To The Supplementary Supervision Of Credit Institutions And Investment In A Financial Conglomerate Firms

Original Language Title: Arrêté du 19 septembre 2005 relatif à la surveillance complémentaire des établissements de crédit et des entreprises d'investissement appartenant à un conglomérat financier

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JORF n ° 220 September 21, 2005 page 15194 text no. 15 Decree of September 19, 2005 relating to the supplementary supervision of credit institutions and investment firms within a financial conglomerate NOR: ECOT0514460A ELI: https://www.legifrance.gouv.fr/eli/arrete/2005/9/19/ECOT0514460A/jo/texte the Minister of economy, finance and industry, having regard to the Council directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 relating to access to the activity credit institutions and its exercise;
Having regard to directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate, and amending directives 73/239/EEC, 79/267/EEC, 92/49/EEC, 92/96/EEC, 93/6/EEC and 93/22/EEC of the Council and directives 98/78/EC and 2000/12/EC of the European Parliament and of the Council;
Seeing the code monetary and financial;
Given order n ° 2004 - 1201 of 12 November 2004 relating to the supplementary supervision of credit institutions, insurance undertakings and investment firms within a financial conglomerate;
Having regard to regulation of the regulatory committee banking No. 90-02 of February 23, 1990 as amended relating to own funds;
Having regard to regulation of the regulatory committee banking No. 90-06 of 20 June 1990 on the interests of credit institutions in the capital of undertakings;
Having regard to regulation of the regulatory committee banking No. 91-05 of 15 February 1991 amended relating to the solvency ratio;
Having regard to regulation of the regulatory committee banking No. 98-04 of 7 December 1998 as amended relating to equity investment firms other than portfolio management companies in existing companies or creating.
Having regard to regulation of the Committee for banking and financial regulation No. 2000-03 of 6 September 2000 as amended relating to the prudential supervision on consolidated basis.
Having regard to the opinion of the Advisory Committee of legislation and financial regulations as of February 25, 2005, May 13, 2005, stop: chapter I:: amendments to Regulation No. 90 - 02 matter of own funds Article 1 article 6 of Regulation No. 90-02 is amended as follows: 1 ° the provisions of article 6 are preceded by an I.
2 ° after I added paragraphs II, III and IV thus worded: "II. -The participations within the meaning of article L. 511-20-II of the monetary and financial code, held in entities in the sector of insurance within the meaning of article L. 517-2-I of the monetary and financial code as well as subordinated debt on these entities are deducted from the sum of the elements referred to in articles 2 to 4, which is calculated taking account of the limits laid down in article 5.
"However, for the purposes of management standards other than those laid down by Regulation No. 88-01 modified 22 February 1988 concerning liquidity, Regulation No. 90-06 modified 20 June 1990 concerning the interests of the credit institutions in the capital of undertakings and Regulation No. 98-04 of 7 December 1998 on equity investment firms other than in existing companies or creating portfolio management companies. , subject institutions may not deduct from their own funds elements referred to in the first subparagraph and, in this case, they are subject to an additional requirement for adequacy of own funds under the terms of the so-called 'accounting consolidation' laid down in point II of the annex to Regulation No. 2000-03 of 6 September 2000.
«The Banking Commission may however decide to impose the deduction of these items in the own funds of institutions subject if it considers necessary for the exercise of supervision, particularly where investments are held in entities whose activity is comparable to those in the banking and investment services, such as those authorized by the 14 (credit) and 15 (caution) branches of article R. 321 - 1 of the French insurance code.»
"III.-for the purposes of management standards other than those laid down by Regulation No. 88-01 modified 22 February 1988 concerning liquidity, Regulation No. 90-06 modified 20 June 1990 concerning the interests of the credit institutions in the capital of undertakings and Regulation No. 98-04 of 7 December 1998 on equity investment firms other than in existing companies or creating portfolio management companies. , business mothers within the meaning of article 1 of Regulation No. 2000-03 so that institutions they control either exclusive or joint can not to deduct, for the calculation of their own based on social funds, the elements referred to in paragraphs I and II of this article. The Banking Commission may however decide to impose the deduction of these items of social of these institutions own funds if it considers it necessary for the exercise of supervision.
"(IV. - when a participation is held temporarily in another institution referred to in points (i) to (iii)) f of article 1 of the abovementioned regulation 2000-03 or an entity within the insurance sector within the meaning of article L. 517 - 2 - I of the monetary and financial code for the purposes of a financial assistance operation designed to clean up and save that entity, the Banking Commission may allow the institution subject to waive the provisions on deduction referred to in this article. '.


Article 2 (A) article 7 of Regulation No. 90-02 above, a new paragraph worded as follows is inserted before the final paragraph: "when a subject establishment is subject to an additional requirement for the capital adequacy in accordance with subparagraph 2 of paragraph (II) of article 6, he deducted from its own basic funds the contribution of the entities in the sector of insurance to the results and consolidated reserves recorded in equity difference. "Chapter II: amendments to regulations No. 2000-03 relating to the prudential supervision on consolidated basis Article 3 under Regulation No. 2000 - 03 above is supplemented by the expression 'and the supplementary supervision '.


Article 4 paragraph (c) of article 1 of Regulation No. 2000-03 above is replaced by paragraph c) following: ' c) subsidiary: the undertaking on which is exercised exclusive control within the meaning of article L. 233 - 16 of the code of commerce, or a dominant influence due to the existence of significant and sustainable solidarity links resulting from financial commitments, leaders or common services.»
Paragraph (e) is replaced by the following paragraph (e): ' e) Group: body of undertakings consisting of a parent undertaking, its subsidiaries and entities in which the parent undertaking or its subsidiaries hold stakes, as well as related entities so that their administrative, management or supervisory bodies are composed predominantly of the same people, or they are placed under one direction under contract or statutory clauses. '' Institutions affiliated to a network and the central body within the meaning of article L. 511 - 31 are considered as part of the same group. » Point v of paragraph (f), the following last sentence is added: "However, the entities under the insurance sector within the meaning of article L. 517 - 2 - I of the monetary and financial code are not financial enterprises. '' "Article 5 the title of chapter II of Regulation No. 2000-03 above is supplemented by the expression" the supervision on consolidated basis.


Article 6 the title of chapter III of Regulation No. 2000-03 above is complemented by the expression "to supervision on consolidated basis.


Article 7a article 7 of law No. 2000-03 referred to above, the following last subparagraph is added: "the Banking Commission determines the terms of consolidation companies related to the meaning of article L. 511 - 20 - III of the monetary and financial code. ''


Article 8 article 8 of Regulation No. 2000-03 above is supplemented by new paragraph (c) worded as follows: ' c) or who has, in the opinion of the Banking Commission, only a negligible interest the objectives of the supervision of institutions subject, including when the company to include total is less than the lowest of the following two amounts. : EUR 10 million or 1% of the balance sheet total of the parent undertaking or the undertaking that holds the participation. If several entities are to be excluded on the basis of negligible interest, Banking Commission decided to include in the consolidation that, collectively, they have a non-negligible interest with regard to these goals. «Article 9 it is created within Regulation No. 2000-03 above a new chapter IV, entitled «Supplementary supervision of financial conglomerates» and including new articles 10 to 17 worded as follows: «art.» 10. - for the purposes of the application of article L. 517 - 3 of the monetary and financial code and the provisions concerning the supplementary supervision of financial conglomerates, and under the terms laid down in the annex to this regulation I.

«I. - the activities of a group mainly exerted in the financial sector within the meaning of article L. 517 - 2.1 when the ratio between the total of the balance sheet of the financial sector of the Group entities and the Group balance-sheet total exceeds 40%.»
«II. - the activities of a group in a financial sector are significant within the meaning of article L. 517 - 3 when the average value of the two reports mentioned below exceeds 10%: "-the relationship between the said sector balance sheet total and the total of the balance sheet of the financial sector of the Group entities,"-"the relationship between the requirements of solvency of the said sector and the financial sector of the Group entities total solvency requirement.»»»»»
«The financial sector which presents the average low is considered the least important financial sector.»
"III. - the activities of a group in a sector are also deemed important within the meaning of article L. 517 - 3 when the balance sheet total of the least important financial sector in the group exceeds EUR 6 billion. ''
"IV.-If a group fulfilling the conditions referred to in 1 ° and 2 ° of article L. 517 I - 3 of the monetary and financial code fell below the threshold referred to in II, but reached the threshold referred to in III of this article, the competent authorities concerned as defined in article L. 517 - 2 of the monetary and financial code may decide by mutual agreement not to consider this group as a financial conglomerate. , or apply to the provisions relating to the adequacy of own funds as defined in article 14 of this regulation.
"The decisions taken pursuant to this paragraph shall be notified to the other competent authorities.
"In accordance with article L. 517 - 3 - III of the monetary and financial code, the Banking Commission, as Coordinator, may decide to subject a subgroup within a financial conglomerate to such supplementary supervision as provided for in article L. 517 - 8 of the monetary and financial code, depending on the requirements of the said supplementary supervision, in the case provided for in article 5 of this regulation. '.
«Art.» 11. - pursuant to article L. 633 - 2 of the monetary and financial code, the Coordinator is appointed from among the competent authorities of the States parties to the European economic area agreement according to the following criteria: "1. when a regulated entity is placed at the head of the financial conglomerate, the Coordinator is the responsible authority for the prudential supervision of the entity;
"2. when a financial holding company mixed‐activity is placed at the head of the financial conglomerate, the Coordinator is the responsible authority for the prudential supervision of the regulated entity subsidiary of the company mixed financial holding:" i) that is licensed in the State in which the financial company mixed‐activity has its headquarters when it is the parent company of several regulated entities having their registered office in States parties to the agreement on the European economic area;
"ii) which operates in the most important, when financial sector several subsidiaries regulated entities of the company mixed financial holding have their headquarters in the same State as this and carry on their activities in different financial sectors;
«iii) that has the highest balance in the financial sector the most important when no regulated entity subsidiary financial company joint holding has been licensed in the State where it has its registered office;
' 3. when several companies financial mixed holding, having their head offices in different States parties to the agreement on the European economic area, are placed at the head of the conglomerate and have at least a subsidiary regulated entity authorised in the State of their siege, the Coordinator is the responsible authority for the prudential supervision of the regulated entity carrying on business in the financial sector the most important or regulated entity that has the largest balance sheet total if these entities. operating in the same financial sector;
"4. in all other cases not covered above, the Coordinator is the authority responsible for the prudential supervision of the regulated entity that has the highest balance in the financial sector the largest total.
«The competent authorities concerned may, by mutual agreement and after obtaining the opinion of the conglomerate, waive these criteria and designate another competent as co-ordinator authority if it appears inappropriate apply, taking into account the structure of the conglomerate and the relative importance of its activities in the various States.»
«Art.» 12 - 12.1. The Banking Commission establishes and updates the list of companies financial holding mixed which it ensures the supplementary supervision.
«12.2 financial companies mixed holding company whose Banking Commission ensures the supplementary supervision report to the Committee of credit and investment firms establishments any appointment or cessation of function of people called, in accordance with article L. 511 - 13, second paragraph, of the monetary and financial code, to determine the direction of their activity. '' This notification, together with all the elements necessary for the control of compliance with the provisions of article 13 of the law of 24 January 1984 and article L. 511 - 13, second paragraph, of the monetary and financial code, takes place within a period of one month after taking or cessation of function.
«Art.» 13 - where a financial holding company whose Banking Commission ensures the supervision on consolidated basis, is identified as head of a financial conglomerate including the Banking Commission is the Coordinator, it is listed on the list of companies financial holding mixed in application of article 12 of this regulation.
"It remains however subject to surveillance consolidated the Banking Commission, under the conditions laid down in article 3(1) of this regulation.
«Art.» 14 - the supplementary capital adequacy requirements referred to in article L. 517 - 8 must be an amount at least equal to the requirements calculated in accordance with the method of accounting consolidation provided for in point II of the annex to this regulation.
However, when it is the Coordinator, the Banking Commission may decide to apply, after consulting the other competent authorities concerned and the relevant financial conglomerate, another one of the methods set out in the annex to this regulation if it appears to him more relevant with regard to the imperatives of supplementary supervision, because including the structure of the concerned financial conglomerate, or at the request of the latter. To assess the admissibility of the prudential in the own funds of the financial conglomerate.
"The Banking Commission, as Coordinator, takes into account the availability and portability of funds between the various entities of the conglomerate the Banking Commission may also decide, after consultation with the other relevant competent authorities and the conglomerate, to ask him to deduct from its equity holdings within the meaning of article L. 511 - 20 - II it holds in entities in the sector of insurance within the meaning of article L. 517-2-I.. In this case, no additional own capital adequacy requirement is calculated.
' Without prejudice to the provisions of article L. 633 - 12, the Banking Commission may, if warranted by the situation of the conglomerate adequacy of own funds, ask that additional requirements are covered by prudential elements allowed by the rules applicable to the insurance sector by applicable to banking and investment services in the sectoral rules limitations. ''
«Art.» 15. - for the purposes of the calculation of the additional requirements adequacy of own funds at the level of a financial conglomerate, the following entities are included in the scope of supplementary supervision in the manner and to the extent defined in the annex to this Regulation: financial enterprises, entities falling within the insurance sector within the meaning of article L. 517 - 2 - I of the monetary and financial code , the companies financial holding mixed.
"The coordinator may decide not to include a particular entity in the scope of calculation of additional requirements in the following cases: ' a) it is located in a State not party to the European economic area agreement where legal obstacles prevent the transfer of the necessary information;
"(b) it has a negligible interest with respect to the objectives of supplementary supervision;
"(c) its inclusion in the scope of calculation is inappropriate with respect to the objectives of supplementary supervision.
"However, if several entities are to be excluded on the basis of b, but that collectively they are of non-negligible interest, they are included in the scope of calculation.
"When the coordinator does not include a regulated entity in the scope of calculation in one of the cases referred to in points b and c and that this entity has its registered office in a State party to the agreement on the European economic area, the entity which is at the head of the financial conglomerate shall provide to the competent authorities of that State, at their request any information likely to facilitate the supervision of the regulated entity.

«Art.» 16 - financial conglomerates, which the Banking Commission is the Coordinator addressed to the general secretariat of the Banking Commission a statement annual, established on the basis of the data at 31 December, detailing the modalities according to which they comply with the additional requirement for the capital adequacy in accordance with a model drawn up by the Banking Commission.
"They also go to the general secretariat of the Banking Commission, on an annual basis, any information relating to significant transactions between different entities of the conglomerate and risk concentrations, under conditions set by the Banking Commission.
«Art.» 17. - without prejudice to the provisions applicable to each entity regulated within conglomerates, they apply the provisions of article 2 of Regulation No. 97-02 above.
"In addition, the regulated entities in a financial conglomerate must develop: '-procedures anticipating the impact of development strategies on the risk profile and the additional capital requirements;
'- of adequate procedures to identify, measure, monitor and control transactions between different entities of the conglomerate and the concentration of risk.
«Financial conglomerates establish reports provided for in articles 42 and 43 of Regulation No. 97-02 above and directed them each year to the Commissioners to the accounts and the general secretariat of the Banking Commission, no later than April 30 following the end of the year.
"If conglomerates are also subject to supervision on consolidated basis of the Banking Commission, the reports referred to in the preceding paragraph are those that they make every year in this capacity, complemented by specific elements on the control and measurement of risks at the level of the financial conglomerate."


Article 10 chapter IV of law No. 2000-03 becomes chapter V and articles 10 and 11 shall become articles 18 and 19.


Article 11 Regulation No. 2000-03 is supplemented by an annex, entitled 'Technical methods to the supplementary supervision of financial conglomerates', and reads as follows: "i. - procedures for determination of the thresholds laid down in article 10 of this regulation 'I-1. For the purposes of the application of article 10 of this regulation, the relevant competent authorities may, by mutual agreement: 'a) exclude an entity of calculating the ratios, in the cases referred to in article 15 of this regulation;
«b) decide that a group may not be identified as a conglomerate if the thresholds provided for in the I and II of article 10 have not been met for three consecutive years and do not take account of such compliance in the event of major change in the structure of the Group;
"(c) in exceptional circumstances, for the calculation of the thresholds established in the I and II of article 10, either replace the criterion based on the balance-sheet total by the structure of the income criterion or the criterion of off-balance sheet activities or those two criteria, either incorporate one of these two criteria, or both, if they consider that they are of particular interest for the purposes of the supplementary supervision of financial conglomerates.
Where a financial conglomerate has been identified in accordance with article 10, the decisions mentioned in the a and b are taken on the basis of a proposal made by the Coordinator of the concerned financial conglomerate.
"I-2. When a financial conglomerate subject to supplementary supervision, the thresholds referred to in I and II of article 10 becomes less than 40% and 10% respectively, thresholds laid down to 35% and 8% respectively shall apply during the following three years.
'Similarly, when the threshold mentioned in article 10 III falls below EUR 6 billion, a lower threshold of EUR 5 billion shall apply during the following three years.
"During this period, the coordinator may, with the consent of the other competent authorities concerned, decide that the supplementary supervision applies more to the financial conglomerate considered, insofar as ratios or amounts do not date back above the normal thresholds.
"I-3. Balance calculations referred to in article 10 of this regulation and this annex are made on the basis of the total of the entities of the Group consolidated balance sheet, in accordance with their annual accounts.
"If these accounts are not available, the coordinator may allow the conglomerate to use aggregate accounts. In this case, the companies in which a participation is held are taken into account up to the amount of their balance sheet total corresponding to the aggregated proportional share held by the group.
I-4. The solvency requirements referred to in article 10 II are calculated in accordance with the provisions of the sectoral rules: '-for companies within banking and investment services, in regulations n ° s 91-05, 95-02 and 97-04 above;
' - for companies in the insurance sector, by chapter IV of title II of Book III of the French insurance code, chapter I of title III of book IX of the social security code and chapter II of title I of book II of the code of mutuality;
' - for portfolio management companies, which are not already included in the requirements of banking and investment services, by article 322-8 of the general regulation of the financial markets authority. ' II. - Technical methods for calculating own funds and adequacy of own funds of financial conglomerates II supplementary requirements - A. -1 accounting consolidation method. Calculation of the own funds of financial conglomerates for the calculation of own funds of financial conglomerates, and by way of derogation from the provisions of the (c) of article 7 of this regulation, the accounts of entities falling within the insurance sector within the meaning of article L. 517 - 2 - I of the monetary and financial code, controlled either exclusive or joint or subject to significant influence, are consolidated by application of the methods specified in Regulation No. 99-07 of the Accounting Regulatory Committee or according to the IFRS standards adopted where appropriate. The own funds of entities falling within the insurance sector are calculated according to the rules applicable to regulated entities of the sector to which they belong.
The own funds of financial conglomerates include: a) the own funds resulting from this consolidation except those mentioned in the next paragraph, calculated in accordance with the provisions of article 7 of Regulation No. 90-02 relating to own funds, excluding section 4 providing for the deduction of the contribution of the entities in the sector of insurance reserves and results consolidated of group;
(b) the elements included, according to specific rules, in supervisory own funds of entities falling within the insurance sector.
When financial conglomerates hold interests in entities of the insurance sector which are consolidated by equity, they can resume, in their own funds, the prudential specifics in the amount of their share in the capital of insurance companies consolidated.
2 methods of calculation of additional requirements for adequacy of own funds own funds of financial conglomerates should be, at any time, greater than or equal to the sum of the solvency requirements to different financial sectors such as defined in the I-4 of this annex. The requirements of non-regulated entities are calculated according to the rules applicable to regulated entities of the sector to which they belong.
II - B. -Other methods for the application of the two methods known from 'deduction and aggregation', and 'value accountant/requirement deduction', described below, the own funds and the solvency of an entity requirements are determined from its annual accounts. Calculations take account of the proportional share held by the parent undertaking or undertaking which holds a participation in another entity of the group. "Proportional share" means the share of subscribed capital that is held, directly or indirectly, by the company. When it is there no capital ties, the share is determined by the Banking Commission after consultation of other competent authorities concerned, based on responsibility born of the relationship between the entity and other entities of the financial conglomerate. In addition, when the entity has a solvency deficiency, this deficit is taken into account in full. However, where the liability of the parent undertaking owning a share of capital is limited strictly and unambiguously to that share of capital, the Banking Commission may decide to admit that the deficit of the entity is taken into account on a proportional basis.
Intra-group transactions are eliminated in a manner equivalent to that provided for the establishment of consolidated or combined accounts.
1. deduction and aggregation additional requirements result from the difference between: a) on the one hand, the sum of the own funds of all regulated and non-regulated financial sector entities;
(b) on the other hand, the sum of the solvency of all requirements entities regulated and non-regulated financial sector and the book value of the participations in other entities of the group.

For non-regulated financial sector entities, a notional requirement is calculated in accordance with the sectoral rules which would apply if it were a regulated entity of the sector concerned.
2. value accountant/deduction requirement additional requirements result from the difference between: a) on the one hand, the own funds of the parent undertaking or the entity that is located at the head of the financial conglomerate;
(b) on the other hand, the sum of the solvency requirement of the parent undertaking or the aforementioned umbrella company and the book value of the participations in other entities of the group or the requirements for solvency of these entities, the amount the higher of the two, whichever.
In the case of non-regulated financial sector entities, a notional requirement is calculated in accordance with the sectoral rules which would apply if it were a regulated entity of the sector concerned.
3. combination of the three methods when Coordinator, the Banking Commission may, under the conditions referred to in the second paragraph of article 14, allowing the financial conglomerate to combine two or three of the methods referred to in this annex. "Chapter III: amendment to Regulation No. 91-05 concerning the solvency ratio Article 12 the first paragraph of article 4 of Regulation No 91 - 05 above is supplemented by the following 4th indent:"-the value of equity securities of participations within the meaning of article L. 511 - 20 - II of the monetary and financial code held by institutions subject in entities in the sector of insurance within the meaning of article L. 517-2-I.

Chapter IV: Amendments to Regulation No. 90-06 relative to the interests of credit institutions in the capital of undertakings Article 13 Regulation No. 90 - 06 referred to above is amended as follows: in the second indent of article 3, the words a: "insurance companies" are followed by the words: 'or reinsurers '.
In the third indent of article 3, the words a: "insurance companies" are followed by the words: 'or reinsurers '.

Chapter V: Amendments to Regulation No. 98-04 on equity investment firms other than portfolio management companies in existing companies Article 14 Regulation No 98 - 04 above is amended as follows: in the second indent of article 3, the words a: "insurance companies" are followed by the words: 'or reinsurers '.
In the third indent of article 3, the words a: "insurance companies" are followed by the words: 'or reinsurers '.

Chapter VI: Final provisions Article 15 the provisions of this order shall apply for the first time, to the supervision of accounts opened from 1 January 2005.


Article 16 this order will be published in the Official Journal of the French Republic.

Done at Paris, on September 19, 2005.
Thierry Breton