Founded in Paris in 1920, Gide is a leading international law firm with 12 offices spread throughout the world.
Gide is physically present in six regions of the world, with 11 offices, enabling it to act on cases globally.
French law is regularly adapted to European Union legislation. Ordinance no. 2024-936 of October 15, 2024, on crypto-asset markets, is a case in point: it aims to adapt French law to Regulation (EU) 2023/1114 of May 31, 2023, known as the MiCA Regulation. Further adaptations are set to be introduced if the draft bill "on various provisions of European Union law relative to the economy, finance, the environment, energy, transport, health and the movement of persons" is passed. As the title of the draft bill indicates, the adaptations are manifold.
It should also be noted that the draft bill does not merely make adaptation proposals, it also provides for the use of ordinances aimed at implementing other adaptations or transposing EU Directives. The European texts relating to the single European access point providing centralized access to financial information are one example (Art. 1, II)
It should also be noted that the provisions relating to banking, monetary and financial law affect the Monetary and Financial Code (Art. 1, 2, 3, 4, 5, 11), the Commercial Code (Art. 4, 6, 7), the Insurance Code (Art. 3, 10), the Consumer Code (Art. 14, 17, 18), the Mutual Insurance Code (Art. 8), the Environmental Code (Art. 9), the Code of Administrative Justice (Art. 15) and the Public Health Code (Art. 19). Last but not least, there is also Ordinance no. 2023-1142 of December 6, 2023 on the publication and certification of sustainability information and on the environmental, social and governance obligations of trading companies (Art. 12).
Also worth mentioning are the new provisions on cross-border group actions (Art. 14). We will not focus our attention on this point however, but will instead concentrate on certain amendments affecting the French Monetary and Financial Code.
Regulation (EU) 2024/791 of February 28, 2024 inserted new Article 33a into Regulation 600/2014 of May 15, 2014, which prohibits financial intermediaries from receiving payment for order flow. The draft bill (Art. 1, I, 2) takes account of this text by amending V of Article L. 533-18 of the French Monetary and Financial Code as follows: "within the limits set out in Article 39a of Regulation (EU) no. 600/2014 of the European Parliament and of the Council of May 15, 2014, investment service providers other than portfolio management companies may not receive a fee, commission or non-monetary benefit from third parties for executing their clients' orders on a given execution venue or for transmitting their clients' orders to a third party for execution on a given execution venue".
Crypto-assets, also known as digital assets, may or may not constitute financial securities. The draft bill contains two provisions, one concerning the law applicable to financial securities covered by the pilot scheme provided for in Regulation (EU) 2022/858 of May 30, 2022 (Art. 1, IV, 1°), the other concerning the pledging of digital assets that do not constitute financial securities (Art. 1, IV, 2°). It should be recalled that until July 1, 2026, the texts will continue to refer to the concept of digital assets, which will then be replaced by the concept of crypto-assets after this date. This explains why the draft bill refers to digital assets, and not crypto-assets, in the text governing pledging.
On May 31, 2024, the Haut Comité Juridique de la Place Financière de Paris (HCJP) published a report "on the determination of the law applicable to assets registered in distributed registers". It made several proposals, one of which concerns the law applicable to financial securities covered by the pilot regime (prev. report, p. 20). This proposal is taken up by future Article L. 211-7 of the French Monetary and Financial Code, according to which "the conditions and property effects of transactions in financial securities registered using distributed ledger technology under the conditions laid down by Regulation (EU) 2022/858 ... are determined by the law of the State where the entity authorized to operate the DLT settlement system or, where applicable, the DLT trading and settlement system is located".
The Ordinance of October 15, 2024, which includes provisions relating to the transfer of crypto-asset ownership, has not however governed the pledging of digital assets. Future Article L. 226-5, which the draft bill plans to introduce into the French Monetary and Financial Code and will govern pledging of securities accounts. The provisions are quite similar, even if the specific nature of digital assets is taken into account, in particular when it is stipulated that the pledge declaration "may be signed by means of an automatic clause executor". However, whether or not the future text is well adapted to digital assets is questionable. As in the case of securities account pledges, it provides for an income and proceeds account. However, for the creation of the pledge there is no provision equivalent to the one whereby "the pledged account shall take the form of a special account".
To combat non-performing loans (NPLs) and help clean up the banking sector, the European Union adopted Directive (EU) 2021/2167 of November 24, 2021, which aims to encourage the transfer of NPLs to third parties and their management by approved professionals. This Directive was transposed by Ordinance no. 2023-1139 of December 6, 2023, which introduced Articles L. 54-11-1 et seq. into the French Monetary and Financial Code. These provisions mainly govern credit managers, although they also refer to credit purchasers, it being specified that the texts concerning credit managers do not apply to credit institutions.
The draft bill (Art. 2, III) supplements the provisions applicable to credit managers with new provisions relating to changes in the conditions under which approval is granted (Art. L. 54-11-1) and to the acquisition, extension or disposal of holdings in credit managers (Art. L. 54-11-5-2). These modifications must be declared to the ACPR (Autorité de contrôle prudentiel et de résolution - French Prudential Supervision and Resolution Authority); transactions concerning shareholding will be subject to the ACPR's prior authorization.
Regulation (EU) 2023/2631 of November 27, 2023 governs the issuance of European green bonds. This is a label that issuers can obtain if they meet the requirements set out in the Regulation. It stipulates that issuers must be supervised by national authorities. The draft bill (Art. I, III, 5°) invests the AMF (French Financial Markets Authority) with this power (Art. L. 621-20-11, French Monetary and Financial Code).
