Paragraph 1: Company mutual funds

I.-1° Company mutual funds which are not subject to the provisions of Book III of Part III of the Labour Code and more than one third of whose assets are made up of securities issued by a foreign company or by any other foreign company belonging to the same group are subject to the provisions of this article.

For the purposes of this article, the group referred to in the previous paragraph is understood to mean all the undertakings included in the same scope of consolidation within the meaning of Articles 2 and 22 of Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings;

2° The provisions of this article also apply to company mutual funds set up under an employee savings plan governed by Titles III and IV of Book III of Part Three of the Labour Code, set up by a company incorporated under French law belonging to a group within the meaning of Article L. 3344-1 of the Labour Code, open to employees of companies incorporated under foreign law within the group pursuant to an agreement governed by foreign law, and in which more than one third of the assets are made up of securities issued by companies within the group.

II - The provisions of II, III and the second paragraph of IV of article L. 214-165 apply to the company investment funds mentioned in I of this article, with the exception of those referring to the Labour Code.

III - The securities of the companies making up the assets of the funds mentioned in I are valued as follows:

1° When the securities issued are admitted to trading on a trading platform of a State of the European Economic Area or a trading platform of a third country recognised as equivalent, the sale price is set on the basis of the stock market price;

2° Where the securities issued are not admitted to trading on a trading platform in a State of the European Economic Area or on a trading platform in a third country recognised as equivalent, the sale price is determined in accordance with objective methods used for valuing shares, taking into account, with an appropriate weighting in each case, the company's net worth, profitability and business prospects. These criteria are assessed, where appropriate, on a consolidated basis or, failing that, by taking into account the financial information of significant subsidiaries.

Failing this, the sale price is determined by dividing the amount of net assets revalued according to the most recent balance sheet by the number of existing shares. This amount is determined for each financial year under the supervision of the statutory auditor.

With effect from the third financial year, the sale price of securities issued by companies employing fewer than five hundred employees may be determined, at the company's discretion, using one of the methods described in the previous two paragraphs;

3° Where the securities issued are bonds which are admitted to trading on a trading platform of a State of the European Economic Area or on a trading platform of a third country recognised as equivalent, these securities are valued at their market value;

4° Where the securities issued are bonds which are not admitted to trading on a trading platform in a State of the European Economic Area or on a trading platform in a third country recognised as equivalent, these securities are valued at their nominal value plus accrued interest.

IV -When a fund referred to in I invests in the securities of a company and these securities are not admitted to trading on a trading platform of a State of the European Economic Area or on a trading platform of a third country recognised as equivalent, the assets of this fund must include at least one third of liquid securities.

This condition is not required in any of the following cases:

1° When a mechanism has been set up to guarantee the liquidity of these securities ;

2° Where the undertaking, the undertaking controlling it or any undertaking controlled by it within the meaning of Articles 2 and 22 of Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, has undertaken to repurchase, up to a limit of 10% of its share capital, securities not admitted to trading on a trading platform in a State of the European Economic Area or on a trading platform in a third country recognised as equivalent held by the fund referred to in I.

In the latter case, the fund's net asset value is published at least once a year. Once the company's appraised value has been communicated, employees have two months before publication of the fund's net asset value to submit their request to subscribe, redeem or arbitrate their assets.

V.-Subscription and acquisition of units in the funds referred to in I above are reserved for employees of a company referred to in I above, under the conditions laid down by the company itself, incorporated under foreign law, where such employees are bound to the company by an employment contract governed by foreign law, or where they have left the company following retirement.

VI - A decree of the Conseil d'Etat determines the conditions of application of this article.