Key Benefits:
Mr. President of the Republic,
This Order provides for the application of the provisions of the Wallis and Futuna Islands in New Caledonia, French Polynesia and the Wallis and Futuna Islands Act No. 2013-672 of 26 July 2013 separation and regulation of banking activities andOrder No. 2014-158 of 20 February 2014 bringing various provisions to adapt legislation to European Union law in financial matters.
The first objective of the Act of 26 July 2013 mentioned above is to implement the commitment of the President of the Republic to separate activities useful to the financing of the economy from speculative activities. To this end, the Act includes measures to separate, strengthen market surveillance and ban certain activities or products. Secondly, it includes provisions relating to the establishment of a banking crisis resolution regime, with in particular the creation of a banking crisis resolution authority, the extension of the role of the Deposit Guarantee Fund and the establishment of new banking crisis management powers. It allows the government to provide new powerful tools to better prevent and manage banking crises by limiting the call to public resources. The law also establishes a macro-prudential authority: the Financial Regulatory and Systemic Risk Board (COREFRIS), known as the High Financial Stability Board, which sees its expanded missions and has a direct response capacity. Finally, the law provides for consumer protection measures in banking matters (subjection of intervention commissions, "bank accessibility", simplification measures, and various provisions, in particular regarding banking and financial demarcation).
The "CRD IV package" - Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 concerning access to the activity of credit institutions and the prudential supervision of credit institutions and investment companies, amending Directive 2002/87/EC and repealing directives 2006/48/CE and 2006/49/EC, said "CRD IV" itself, and European regulation No. 575/2013 of the European Parliament 2013 and the Council This is the European decline in international agreements called "Basel III" to strengthen and harmonize requirements in equity and introduce liquidity standards for the banking sector. It also includes several measures, not directly related to the "Basel III" agreements, to harmonize European practices, including accreditation, governance, including compensation, supervision and sanctions policies. The "CRD IV package" applies to credit institutions and investment companies other than portfolio management companies. Overseas countries and territories (PTOM) are not affected by this European entry into force deadline.
The choice to extend in New Caledonia, French Polynesia and the Wallis and Futuna Islands these two texts of importance to banking and financial regulation in a concomitant manner in the same order has been imposed on the Government in view of their complementarity. Indeed, several measures related to the governance, remuneration or prudential regimes of credit institutions have involved regulatory adjustments of identical articles of the monetary and financial code.
The main options for the development of this Order are:
1° The order provides for a general adaptation by referring to a Minister's order the extension to these territories of Regulation No. 575/2013 of the European Parliament and of the Council of 26 June 2013 concerning prudential requirements for credit institutions and investment companies. Indeed, European regulations are not of direct applicability in the PTOM, except in Saint-Barthélemy under the monetary agreement of 12 July 2011 to ensure the maintenance of the euro, and are extended by way of a decree of the Minister for Saint-Pierre-et-Miquelon under the terms of theArticle L. 711-16 of the Monetary and Financial Code ;
2° The order provides for the extension without substantive adaptation of all provisions applicable at the national level in order to avoid regulatory arbitrations and to ensure financial stability. The only proposed adaptations are legal - in order to take into account the competences vested in the communities - and institutional - in order to take into account the specificities of the administrative environments of these territories. The proposed adaptations for the Wallis and Futuna Islands are less important than those mentioned for New Caledonia and French Polynesia, as the statutes of these islands provide for a State competence, which is wider than for the other two territories, especially on areas such as commercial law and insurance law.
Accordingly, this Order provides that the jurisdiction of the High Financial Stability Board (HCSF) is extended to these territories with an adaptation of section L. 631-2 to sections L. 746-8, L. 756-8 and L. 766-8 the monetary and financial code providing that the expertise of the Overseas Emission Institute can be requested by the HCSF. Thus, it is proposed to extend the provisions of the law establishing a security of borrowings undertaken by municipalities and agencies specializing in the management of social housing, which implies changes in the New Caledonia Community Code, on the one hand, and general code of territorial authorities for French Polynesia, on the other hand. Book VII of the monetary and financial code is also amended to secure borrowings from local social habitat management organizations.
Thus, all of the provisions contained in Directive CRD IV relating to matters of accreditation, governance, supervision, complementary requirements of equity ("pillar 2"), equity cushions, consolidated monitoring, sanctions and information exchange are extended throughout the national territory.
Finally, this Order extends without adjustment section 52 of the aforementioned Act of 26 July 2013 to capped the intervention commissions in order to protect the most fragile audiences.
This order is made under:
- Article 80 of the Act of 26 July 2013 referred to above, which gives the Government a period of eighteen months from the promulgation of the law;
- theArticle 11 of Act No. 2014-1 of 2 January 2014 enabling the Government to simplify and secure the lives of businesses, which provides for a period of eight months to carry out the extension in addition-sea of the legislative provisions for the transposition of Directive CRD IV.
This Order is based on these authorizations.
It includes seven chapters:
- Chapter I contains the extension provisions specific to New Caledonia;
- Chapter II contains the extension provisions specific to French Polynesia;
- Chapter III contains the provisions of extension specific to the Wallis and Futuna Islands;
- Chapter IV contains the provisions that apply identically in New Caledonia, French Polynesia and the Wallis and Futuna Islands;
- Chapter V brings together the provisions common to New Caledonia and French Polynesia;
- Chapter VI contains the adaptation provisions to the Institute for the Emission of Overseas Departments and the Institute for the Emission of Overseas;
- Chapter VII is devoted to transitional and final provisions.
Articles 1st, 9 and 17 extend and adapt respectively to New Caledonia, French Polynesia and the Wallis and Futuna Islands the provisions amending the articles of Book I of the monetary and financial code.
In particular, articles L. 141-5-1 and L. 141-6-1 the monetary and financial code, which aims to ensure the stability of the financial system, gives the issuing institutions an alerting power to the Authority for prudential control and resolution in the event of an emergency situation observed in the financial system of these communities.
Articles 2, 10 and 18, respectively, extend to New Caledonia, French Polynesia and the Wallis and Futuna Islands the provisions amending the articles of Book II of the monetary and financial code, in particular the amendment made by the law of 26 July 2013 referred to in L. 221-9 of the aforementioned Act. monetary and financial code relating to the observatory of regulated savings.
Articles 3, 11 and 19 extend and adapt, respectively, to New Caledonia, French Polynesia and the Wallis and Futuna Islands, the amendments introduced by these texts to the articles of Book III of the Monetary and Financial Code.
In addition, the article provides for the creation of a new article in the monetary and financial code relating to the supervision of borrowings undertaken by local social habitat management organizations and their groupings, in order to avoid any further difficulties that might affect them.
Articles 4, 12 and 20 extend and adapt respectively to New Caledonia, French Polynesia and the Wallis and Futuna Islands the modifications made by these texts to the articles of Book IV of the monetary and financial code. This is the market and asset management component of the above-mentioned law, including provisions relating to the powers and operation of the Autorité des marchés financiers (AMF) and the Autorité de contrôle prudentiel et de résolution (ACPR).
Articles 5, 13 and 21 extend and adapt respectively to New Caledonia, French Polynesia and the Wallis Islands and Futuna the provisions affecting Book V of the Monetary and Financial Code.
A general adaptation provision is introduced, through the creation of a new section, for each of these communities, at the beginning of the chapter of the extension of Book V of this Code, in order to refer to a Minister's order the extension of the provisions of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 concerning the prudential requirements applicable to credit institutions and investment companies. This regulation specifies the prudential requirements for credit institutions and investment companies.
These articles extend the main provisions of the "CRD IV" directive, including:
- the provisions of Article L. 511-41-1 Again from monetary and financial code, which provides that credit institutions and financing companies may be subject to additional equity obligations (" cushions") under conditions defined by order of the Minister responsible for the economy. Where they do not meet these additional obligations, credit institutions or funding companies restrict the remuneration of Category 1 equity and certain categories of personnel. The provisions of Article L. 511-41-1 A in its earlier drafting of this Order, which were repeated in Article L. 511-102, are also extended;
- theArticle L. 511-41-3 of the Monetary and Financial Code, which strengthens the competence of the Authority for prudential control and resolution, in particular to enable it to take all liquidity measures and, more broadly, any measures intended to restore or strengthen the financial or liquidity situation of entities subject to its control when the information it receives leads it to consider that an entity is likely to fail, within twelve months, its obligations. Similarly, the list of cases where the prudential control and resolution authority may require specific funds in excess of the minimum amount ("pillar 2") is supplemented as well as that of interim measures (including the possibility of assigning results, limiting the variable share of remuneration and reporting obligations). Finally, the Autorité de contrôle prudentiel et de résolution may submit an entity to a specific liquidity requirement;
- the main measures relating to the governance and supervision of remuneration in credit institutions.
Articles 6, 14 and 22 extend and adapt, respectively, to New Caledonia, French Polynesia and the Wallis and Futuna Islands, the amendments made to the articles of Book VI of the monetary and financial code introduced by these texts and those of the articles created, with the necessary modifications.
A general adaptation provision is introduced by the creation of a new section, for each of these communities, at the beginning of the chapter of the extension of Book VI of this Code, in order to refer to a Minister's order the extension of the provisions of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 concerning the prudential requirements applicable to credit institutions and investment companies.
These provisions include the extension of new sanctions provisions by supervisors of credit institutions and investment companies other than portfolio management companies, transposed to theArticle L. 612-40 of the monetary and financial code. In fact, Directive CRD IV provides for a strengthened and harmonized sanctions regime: supervisory authorities will now be able to impose monetary penalties on legal persons in a maximum amount of 10% of the annual turnover or twice the benefit withdrawn from the breach when it can be determined and to issue a temporary suspension, resignation from office or a monetary penalty in the amount of up to five million euros. A mechanism for reporting misconduct and prudential regulations by the staff of the entities concerned is also in place.
Sections 7, 15 and 23 extend into the three Pacific territories the amendments to the Articles of Title I of Book III of the Consumer Code, devoted to credits, as well as the creation of articles in the same title. It adds the necessary adaptations from the competences of these territories and their characteristics.
Article 23 also includes the extension of the articles of chapter III of title III of the same code in the Wallis and Futuna Islands. The provisions of this chapter can only be made applicable in that community.
Article 8 creates a new article in the New Caledonia Community Code in order to secure the borrowings made by the municipalities and their groupings, thus avoiding any further difficulties that might damage them. It specifies that these borrowings may be subscribed to foreign currency, euros or CFP francs and it regulates the deviations of indexes allowed for indexing clauses of variable interest rates.
Similarly, section 16 provides that it is applicable in the general code of territorial authorities, for the municipalities of French Polynesia and their groupings, the articles created by law in this same code, which provide for the supervision of loans made by the local authorities at the national level.
Article 24 is devoted to the extension in the Wallis and Futuna Islands of the amendments and creations of articles in the insurance code.
Chapter IV and section 25 of this Order combines the provisions that apply identically in New Caledonia, French Polynesia and the Wallis and Futuna Islands, by the amendment to an article of the Order Consumer codecommon to all three communities. An adaptation is also introduced to delete the reference to an article in Chapter II of the same title in Book III of the Consumer Code, which is not applicable to the Wallis and Futuna Islands.
Chapter V provides for provisions common to New Caledonia and French Polynesia.
Section 26 provides for the extension in New Caledonia and French Polynesia of the amendments made to the articles of Chapter II of Title I of Book III of the Consumer Code, devoted to real estate credit. Indeed, this chapter is not applicable to the Wallis and Futuna Islands, in which real estate falls under customary law.
The article previews an adaptation to replace the references to the euro with those of the CFP franc.
Chapter VI provides for specific provisions to overseas emission institutes.
Article 27 extends the new missions established for the Bank of France to monitor the stability of the financial system in the territory of the overseas departments and communities of Saint-Martin, Saint-Barthélemy and Saint-Pierre-et-Miquelon, in the region of Saint-MartinArticle L. 711-2 of the Monetary and Financial Code.
The second paragraph of this article L. 711-2 provides the principle of delegation of the missions of the Bank of France specified in its first paragraph at the Institute of Overseas Departments.
Article L. 711-2 is supplemented by a new paragraph, which extends the principle of non-application of professional secrecy for the managers of credit institutions and finance companies, to this institute, as is the case for the Bank of France.
TheArticle L. 712-6 of the Monetary and Financial Code introduced, for the Overseas Emission Institute, the monitoring mission of the proper operation of payment systems and compensation systems. Article 27 of this Order adds two new paragraphs to this Article, which describe the procedures that the Institute may use to carry out these missions in the best possible conditions.
Chapter VII is devoted to transitional and final provisions.
Section 27 provides that the transitional and final provisions of the Act and Order be applicable by giving an additional year to the various local actors to comply with the provisions of this Order.
This is the subject of this order that we have the honour to submit to your approval.
Please accept, Mr. President, the assurance of our deep respect.
