Key Benefits:
Publics concerned: financing companies.
Purpose: prudential regime applicable to funding companies.
Commencement: This Order comes into force on 1 January 2014.
Notice: The purpose of this Order is to determine the prudential regime applicable to funding companies, a regime comparable to that applicable to credit institutions. It provides that, with the exception provided for in this Order, the financing companies shall be required to comply with the provisions applicable to credit institutions in accordance with:
1° Regulation (EU) No 575/2013 of the European Parliament and Council of 26 June 2013 concerning prudential requirements for credit institutions and investment companies;
2° Regulation of the Banking Regulation Committee No. 91-05 of 15 February 1991 on solvency ratio;
3° Regulation of the Banking and Financial Regulatory Committee No. 97-02 of 21 February 1997 on the internal control of credit institutions and investment companies;
4° From the May 5, 2009 decision on the identification, measurement, management and control of liquidity risk.
The derogations from these provisions of this Order are limited to adjustments strictly necessary in the light of the specificities of the financing companies.
References: the provisions of this Order are available on the website Légifrance (http://www.legifrance.gouv.fr).
Minister of Economy and Finance,
Having regard to Regulation (EU) No. 575/2013 of the European Parliament and Council of 26 June 2013 concerning prudential requirements for credit institutions and investment companies and amending Regulation (EU) No. 648/2012, as well as corrigenda published in the Official Journal of the European Union of 2 August 2013 and 30 November 2013;
Having regard to Council Directive 86/635/EEC of 8 December 1986 on the annual accounts and consolidated accounts of banks and other financial institutions;
Vu le Trade code ;
Vu le monetary and financial codeincluding articles L. 511-41, L. 611-1 and L. 612-2;
Having regard to the Regulation of the Committee on Banking Regulation No. 90-02 of 23 February 1990 on its own funds;
Considering the Regulation of the Banking Regulation Committee No. 91-05 of 15 February 1991 on the solvency ratio;
Having regard to the Regulation of the Banking and Financial Regulatory Committee No. 96-16 of 20 December 1996 on changes in the situation of credit institutions and investment companies other than portfolio management companies;
Having regard to the regulation of the Banking and Financial Regulation Committee No. 97-02 of 21 February 1997 on the internal control of credit institutions and investment companies;
Having regard to the Regulation of the Accounting Regulatory Committee No. 99-07 of 27 November 1999 on consolidation rules;
Considering the 5 May 2009 decision on the identification, measurement, management and control of liquidity risk;
Considering the decision of the Autorité de contrôle prudentiel et de résolution of 12 November 2013 taken for the implementation of Regulation (EU) No 575/2013 of the European Parliament and the Council of 26 June 2013 referred to above;
In light of the Advisory Committee on Financial Legislation and Regulations dated 11 December 2013,
Stop it!
The provisions of this Order shall apply:
1° To finance companies, within the meaning of II of Article L. 511-1 of the Monetary and Financial Code ;
2° To parent companies of financing companies, as defined in Article L. 517-1 of the same code.
Except as otherwise provided by this Order, the financing companies are required to comply with the provisions applicable to credit institutions under:
1° Regulation (EU) No. 575/2013 of the European Parliament and the Council of 26 June 2013 referred to above;
2° Regulation of the Banking Regulation Committee No. 91-05 of 15 February 1991 referred to above;
3° Regulation of the Banking and Financial Regulation Committee No. 97-02 of 21 February 1997 referred to above;
4° From the decree of May 5, 2009 referred to above.
Mutual Guarantee Funds shall be eligible as a Category 1 base equity instrument, within the meaning of Article 26 of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 referred to above, under the conditions of Article 29 of the Regulation if the conditions set out in Article 28 of the Regulation, with the exception of the conditions set out in paragraph 1, point c, are met. With the exception of the provisions of section 29, paragraph 4, of these Regulations, mutual funds of collateral may not give participants any right to the reserves of the financing corporation or, where appropriate, give rights of a limited amount. They grant no voting rights to their participants.
Eligible for Category 2 equity, as defined in Article 62 of Regulation (EU) No 575/2013 of the European Parliament and the Council of 26 June 2013 referred to above:
1° The derogatory depreciation and latent reserve that appears in the financial accounting of the lease or lease transactions with purchase option, for the financing companies that are not subject to the calculation of the equity on a consolidated basis;
2° Non-eligible fully pooled security funds in Category 1 core funds within the meaning of Article 26 of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 referred to above, after deduction of claims in refund due;
3° The non-eligible Mutual Guarantee Funds in Category 1 Core Funds, as defined in Article 26 of the above-mentioned Regulation (EU) No 575/2013 of the European Parliament and Council of 26 June 2013, other than the funds mentioned in 2 of this Article and the public funds allocated to the guarantee of categories of credit transactions, within the limit of 8% of the risks they cover.
I. ― By derogation from Article 72 of Regulation (EU) No 575/2013 of the European Parliament and of the above-mentioned Council of 26 June 2013 are deducted from the equity of a financing company the assets and non-balanced commitments made by a financing company to its principal directors and shareholders, including the commitments that guarantee the performance of an obligation contracted by the principal directors and shareholders.
By derogation from sections 111 and 166 of the Regulations, the deduction of leasing operations or similar transactions within the meaning of second paragraph of Article L. 313-1 of the Monetary and Financial Code, is calculated on the basis of financial accounting.
II. - For the purposes of this article:
1° Are reputed leaders:
(a) The leaders mentioned to theArticle L. 511-13 of the Monetary and Financial Code ;
(b) Any person responsible for the executive, administrative, or member of the supervisory board of a corporation subject to Book II of the Commercial Code, or any other person performing equivalent functions under the laws or statutes to which the funding corporation is subject, as well as their permanent representatives, spouses, ascendants and descendants in the first degree;
(c) Any person responsible for the executive or administrative powers in a legal entity who exercises exclusive or joint control over the financing corporation, directly or indirectly, within the meaning of the regulations of the Accounting Regulatory Committee No. 99-07 of 27 November 1999 referred to above, except for the institutions subject to the IFRS standards for which these concepts are defined in the IFRS standards adopted;
(d) Any person responsible for the executive or administrative powers in a legal entity on which the financing company exercises, directly or indirectly, exclusive or joint control, within the meaning of the above-mentioned Regulation Committee Regulation No. 99-07 of 27 November 1999, except for the institutions subject to IFRS standards for which these concepts are defined in the IFRS standards adopted;
(e) Any legal entity on which an officer referred to in d exercises exclusive or joint control;
(f) Any person interposed between the funding corporation and an officer referred to in a to d;
2° Are deemed principal shareholders:
(a) Any person, or group of persons holding together or separately, directly or indirectly, more than one tenth of the voting rights, calculated in accordance with the terms set out in article 4 of Regulation No. 96-16 of the Banking and Financial Regulatory Committee of 20 December 1996 referred to above;
(b) Any legal entity on which the persons or groups of persons referred to in the above shall exercise exclusive or joint control, directly or indirectly, within the meaning of Regulation No. 99-07 of 27 November 1999 referred to above, except for those institutions subject to IFRS standards for which these concepts are defined in the IFRS standards adopted;
3° The deductions are calculated in accordance with the provisions of Part IV of Regulation (EU) No. 575/2013 of the European Parliament and the Council of 26 June 2013 referred to above. However, deductions for documentary credits, granted or confirmed, are calculated in accordance with the provisions of Articles 111, 119, 120 and 121 of the Regulations.
III. - Not subject to the provisions of this article:
1° The transactions concluded with the principal directors or shareholders who receive a rating more favourable than 4 on the rating scale of the Bank of France or whose securities and bank debts receive a rating at least equal to that mentioned in the appendix to this order;
2° The transactions concluded with principal directors or shareholders and explicitly guaranteed to the benefit of the financing company by a corporation that has a rating or rating mentioned in a;
3° Operations between affiliates of the same central body referred to in theArticle L. 511-30 of the monetary and financial code ;
4° Commitments on legal persons on which the subject establishment exercises exclusive control, in accordance with the above-mentioned Regulation Committee Regulation No. 99-07 of 27 November 1999, except for establishments subject to IFRS standards for which this concept is defined in the adopted IFRS standards;
5° Commitments on legal persons on which the subject establishment exercises joint control in the event that control is shared with persons other than those deemed principal shareholders by the II of this section;
6° The share of risks on the same beneficiary, within the meaning of Part IV of Regulation (EU) No. 575/2013 of the European Parliament and the Council of June 26, 2013 referred to above, which does not exceed 3% of the specific funds of the subject establishment defined in Article 72 of the Regulations, before deduction of the elements mentioned in this Article.
IV. - For the purposes of paragraph 1 of Article 113, Article 151 and the e of Article 390, paragraph 6, of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013, the deductions made under this Article shall be assimilated to the deductions made under Articles 36, 56 and 66 of the Regulations.
Between 1 January 2014 and 31 December 2021, the mutual funds of guarantee that were recognized as the base funds on 31 December 2013, under the above-mentioned Regulation Committee 90-02 of 23 February 1990 are recognized as the base funds of category 1, within the meaning of Article 26 of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 referred to above, under the same terms and conditions
For the purposes of paragraph 1 of Article 484 above, the amount of Mutual Guarantee Funds eligible for Class 1 equity is limited to the applicable percentage of the nominal amount of Mutual Guarantee Funds eligible for base equity on 31 December 2013, in accordance with Article 486, paragraph 5.
Financing companies are not subject to the liquidity and levers provisions set out in Regulation (EU) No. 575/2013 of the European Parliament and the Council of 26 June 2013 referred to above, including those contained in the sixth and seventh parts of the Regulation.
The decision of the Supervisory and Resolution Authority of 12 November 2013 referred to above is applicable to the financing companies.
The Autorité de contrôle prudentiel et de résolution may exempt the financing companies from the requirement of equity calculated in accordance with Articles 378 and 379 of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 referred to in the conditions set out in Article 380 of the Regulations.
Unless otherwise provided, by-laws or by-laws adopted by the European Commission that supplement Regulation (EU) No 575/2013 of 26 June 2013 referred to by technical standards of regulation or technical standards of execution do not apply to funding companies.
The modalities of reporting by the financing companies of the information necessary to monitor compliance with the requirements set out in Regulation (EU) No 575/2013 of the European Parliament and the Council of 26 June 2013 referred to and its implementation are defined by an instruction of the Autorité de contrôle prudentiel et de résolution.
For the purposes of paragraph 5 of Article 119 and the e of Article 129, paragraph 1, of Regulation (EU) No 575/2013 of the European Parliament and of the Council of June 26, 2013, the prudential requirements to which funding companies are submitted are deemed to be comparable in terms of solidity to those that apply to establishments, as defined in Article 4, paragraph 3, of the Regulations.
In the absence of a decision by the European Commission, the assessment of the equivalence of the standards in force in third countries, when required by Regulation (EU) No. 575/2013 of the European Parliament and the Council of 26 June 2013 referred to above, may be the subject of a decision of the Autorité de contrôle prudentiel et de résolution.
The parent financing companies and the financing companies they control are subject to the provisions of Regulation (EU) No 575/2013 of the European Parliament and of the aforementioned Council of 26 June 2013 applicable respectively to the holding financial companies or to the establishments they control.
This Order comes into force on 1 January 2014.
The present order will be issued in the Official Journal of the French Republic.
A N N E X E
LIST OF RECONNUAL ASSESSMENT BODIES AND MINIMUM CATEGORY
DE NOTATION ACCEPTÉ MENTIONNÉE AU 1° DU III DE L'ARTICLE 5 DU PRESENT ARRÊTÉ
| Canadian Bond Rating Service | B++low | A-3 |
| Dominion Bond Rating Service | BBBlow | R-2 |
| Duff and Phelps, Inc. | BBB- | F-3 |
| Fitch Investors Service, Inc. | BBB- | F-3 |
| IBCA Notation | BBB- | A3 |
| Japan Credit Rating Agency, Ltd | BBB- | J-2 |
| Moody's France | Baa3 | P-3 |
| Moody's Investors Service | Baa3 | P-3 |
| Nippon Investor Services, Inc. | BBB- | A-3 |
| Standard and Poor's-Adef | BBB3 | T1 |
| Standard and Poor's International | BBB- | A-3 |
| The Japan Bond Research Institute | BBB- | A-2 |
| Thomson Bankwatch | BBB- | A3 |
Done on 23 December 2013.
Pierre Moscovici
