Agents providing payment services
Directive 2007/64 EC, allows non-authorised persons acting under a mandate, termed “agents”, and subject to less strict registration conditions than an authorisation requirement, to provide payment services for which their principal has been authorised.
Although custody account-keeping and financial instrument clearing services are neither bank activities nor investment services, their exercise is subject to prior authorisation of the Prudential Supervisory Authority (see Articles L. 440-2, L. 542-1, R. 532-2 and R. 542-1 of the Monetary and Financial Code).
Autorité de contrôle prudentiel et de résolution
Under the terms of the Monetary and Financial Code the Committee shall be responsible for taking the decisions and granting the individual authorisations or exemptions [provided for in the laws and regulations] applying to credit institutions, with the exception of those within the competence of the Commission Bancaire.
The ACPR is chaired by the Governor of the Banque de France, who is also the chairman of the Commission Bancaire, or his representative. It comprises three other members ex officio: the Head of the Treasury or his representative, the chairman of the Autorité des marchés financiers or his representative, the chairman of the managing board of the guarantee fund or a member of the managing board representing him as well as eight members or their alternates appointed by Order of the Minister of Finance for a three year term.
The Direction de l'agrément, des autorisations et de la réglementation of the Banque de France is in charge of the Secretariat of the Committee. As such it prepares, under the authority of the Secretary General of the Committee, the examination of the applications submitted to the Committee.
Autorité des Marchés Financiers (AMF)
The Financial Security Act 2003-706 of 1 August 2003 creates the Autorité des marchés financiers by merging the Commission des opérations de bourse (COB), the Conseil des marchés financiers (CMF) and the Conseil de discipline de la gestion financière (CGDF).
The Autorité de contrôle prudentiel is an independant public authority having legal personality and financial independance.
The AMF shall be responsible for:
- The protection of savings invested in financial instruments and all other investments giving rise to public offerings.
- Investor information.
- The smooth functioning of markets for financial instruments.
The AMF comprises:
- A Board of 16 members.
- A Disciplinary Commission of 12 members.
- Specialised commissions and consultative commissions.
Subject to any restrictions imposed by their authorisation and, where relevant, by their status, credit institutions may, generaly speaking, carry on the following types of business :
- Bank operations, meaning the receipt of deposits, credit operations and the providing of bank payment services ;
- Operations related to their business, referred to at Article L. 311-2 of the Monetary and Financial Code (related operations include non-bank payment services).
Shall mean the carrying out of banking operations as defined in Article L. 311-1 of the Monetary and Financial Code.
Branch (within the procedure of right of establishment)
Branch means a place of business established in a Member State other than that in which its registered office is located. A branch forms a legally dependant part of a credit institution and carries out directly all or some of the transactions inherent in the business of credit institutions (Article 4 of Directive 2006/48/EC of 14 June 2006).
The business name is the name under which a legal entity designates the business it operates in order to identify it in its relations with customers. If the company operates several businesses, several business names may be used.
In practice, the scope of possible activities granted by an authorisation differs according to the entity and the category (credit institution for example) to which this entity belongs.
Clearing is the activity which enables banks and financial institutions to carry out transactions. A transaction involves a debtor and a creditor.
A bookentry always reflects the transaction and consequently the clearing settlement itself, that consists in mutual indetebtedness between two entities
Contributors of capital
Any person deciding to invest directly or indirectly the funds required to the creation of the institution.
Shall mean legal persons carrying out banking operations as their regular business. There are three types of credit institution: banks, mutual or cooperative banks, municipal credit banks, finance companies and specialised financial institutions.
Custody services include the registration of financial instruments in the name of their owner (with a view to taking into account the latter’s rights as well as the safe-keeping of said financial instruments.
Financial holding company
A financial holding company is a financial institution which has as its subsidiaries, exclusively or principally, one or more credit institutions or investment companies. As it is not a credit institution, a financial holding company may not carry out banking operations.
Freedom to provide services
The term "freedom to provide services" refers to the means by which a credit institution or an investment firm may provide, in a Member State other than that in which its registered office is located, banking services other than through its permanent presence in that Member State (Article L. 511-21 of the Monetary and Financial Code).
A general partnership is a trading company which shall be known to the public by its registered name.
Each partner in a general partnership shall be deemed to be a merchant and, jointly and severally, personally liable for debts and taxes of the partnership.
Investment firms are legal entities. They provide investment services that are defined in Article L. 321-1 of the Monetary and Financial Code.
Investment service provider (ISP)
The investment service providers are the investment firms and credit institutions which have been authorised to provide investment services within the meaning of Article L. 321-1.
In France an investment service provider,
- Having as its principal activity the provision of the service referred to in 4 of Article L. 321-1 (portfolio management for third parties) is approved by the Autorité des marchés financiers and designated a "portfolio management company" ;
- By which the service referred to in 4 of Article L. 321-1 (portfolio management for third parties) is not a core activity shall be approved by the ACP. Where they provide this service as an adjunct to another service the ACP grants authorisation, but the programme of operations must be approved by the AMF.
The term “Investment services” is defined in Article L. 312-1 of the Monetary and Financial Code.
1. Receiving and Transmitting orders for Third Parties.
2. Executing orders for Third Parties.
3. Trading for Own Account.
4. Portfolio Management for Third Parties.
5. Financial Investment Consultancy.
6B. Placing of financial instruments on a firm commitment basis.
7. Placing of financial instruments without a firm commitment basis.
8. Operation of multilateral trading facilities.
A limited partnership comprises two groups of partners:
- one or more general partners (GPs), who shall be, jointly and severally, personally liable for the debts and taxes of the partnership,
- one or more limited partners (LPs) who have limited liability, i.e. they are only liable for the debts incurred by the firm to the extent of their registered investment.
Under the terms of Regulation 90-02 of 20 February 1990, own funds shall comprise the sum of original own funds and additional own funds.
The providing of payment services as a regular business is restricted to payment services providers (payment institutions and credit institutions). The list of payment services mentioned at Article L. 314-1, II, paragraphs 1° to 7° of the Monetary and Financial Code is almost identical to the list in the annex of the Payment Services Directive (Directive 2007/64/EC of 13 November 2007).
Portfolio management company
Under the terms of Article L. 532-9 of the Monetary and Financial Code, a portfolio management company is an investment firm that, as its main business, manages individual or collective portfolios of financial instruments for third parties.
This business may be carried on behalf of:
- Collective investment undertakings, i.e. open-end investment companies with variable capital and unit trusts,
- Individual or institutional investors.
Such activity requires an authorisation from the AMF as well as a power of attorney granted by the investors.
Before granting authorisation the AMF shall examine the legal form, the capital and the suitability of the senior managers.
Registration number of a payment services provider
The Prudential Supervisory Authority gives a number that designates the payement services provider. If the agent is already registered in the Commercial and Companies Register, the registration number is not different from the SIREN number.
Like natural persons, all legal persons have a name that is used to designate them, just like the patronimic name defines a natural person.
In the case of commercial companies - general partnership, partnership, limited stock partnership, plc, Ltd, close corporation (société par actions simplifiée)-, this name is the registered name of the company and the company name (raison sociale) for private companies (sociétés civiles).
A company is required to display the registered name in the statute. Where registered, the name of the company is protected against any abuse by third parties.
A company may have only one registered name.
Credit institutions having their registered office abroad may open offices to provide information, liaison or representation services. The opening of such offices requires prior notification to the Autorité de controle prudentiel.
Revocation of authorisation
The ACP is responsible for revoking authorisation from institutions and firms either at their request or ex officio in certain specific conditions. In this event, the institution or firm may no longer carry on any regulated banking or financial activities.
Right of establishment
The right of establishment in another country party to the European Economic Agreement means that a credit institution or an investment firm having its registered office in France has the right to establish branches in other Member States.
The provisions concerning the right of establishment do not apply to the establishment of subsidiaries. Where a credit institution wishes to establish a subsidiary in another Member State, an authorisation from said Member State (i.e. host Member State) shall be requested.
The senior managers are in charge of the effective determination of the general guidelines of the business of credit institutions or investment firms. They shall meet the conditions mentioned in Articles L. 511-10 and L. 532-2 of the Monetary and Financial Code.
The equity capital corresponds to the amount of the nominal value of the shares issued by a company and allocated to the partners or shareholders in exchange for their contribution.
Subsidiary shall usually mean an undertaking in which another undertaking (a parent undertaking) has a majority of the shareholders’ or members’ voting rights or has the right to exercise a dominant influence.
Under the terms of Article 1 of Regulation 2000-03 of the CRBF a subsidiary shall mean a company under exclusive control.
Updated on: 10/02/2017 17:29