French Monetary and Financial Code
In forceI. - Exposure to the risks referred to in I of Article L. 214-168 may result from the acquisition, subscription or holding of receivables or other assets referred to in III below, the granting of loans or the conclusion of contracts constituting forward financial instruments or transferring insurance risks, guarantees, sureties or risk or cash sub-participations.
The financing or hedging of the risks referred to in I of Article L. 214-168 may result from the issue of units or shares or debt securities, the conclusion of contracts constituting forward financial instruments, guarantees, sureties, sub-participations in risk or cash flow or transferring insurance risks, or by recourse to borrowing or other forms of resources, debts or commitments.
The units, shares and debt securities issued by the undertaking may not be sold, except to qualified investors mentioned in II of article L. 411-2.
II. - The units or shares and debt securities issued by the securitisation undertaking may give rise to different rights, in particular to capital or interest. The rules or articles of incorporation of the undertaking and any contract entered into by it may provide that the rights of certain categories of unit-holders, shareholders, holders of debt securities or certain creditors of the undertaking are subordinated to the rights or interests of other categories of unit-holders, shareholders, holders of debt securities or other creditors of the undertaking.
III. - A securitisation undertaking may hold equity securities received by conversion, exchange or redemption of debt securities or securities giving access to the capital, or by the exercise of the rights attached to such securities.
IV.Where the rules or articles of incorporation of the securitisation undertaking so provide, that undertaking may, notwithstanding III of Article L. 214-168, be established and managed by a sponsor within the meaning of Article 2(5) of Regulation (EU) 2017/2402 of the European Parliament and of the Council of 12 December 2017 creating a general framework for securitisation and a specific framework for simple securitisations, transparent and standardised securitisations and amending Directives 2009/65/EC, 2009/138/EC and 2011/61/EU and Regulations (EC) No 1060/2009 and (EU) No 648/2012, if that sponsor delegates the management of the portfolio of that undertaking to a portfolio management company referred to in Article L. 532-9 of this Code authorised to manage securitisation undertakings. When exercising this delegation, the portfolio management company complies with all the requirements applicable to the management of a securitisation undertaking as set out in this section and in Title III of Book V of this Code.
V. - Under the conditions and within the limits set by decree of the Conseil d'Etat, a securitisation undertaking for which the use of leverage is subject to limitations may grant loans to non-financial undertakings. Loans granted in this way have a maturity of less than the residual life of the undertaking.
VI. - The maximum net loss or commitment incurred by a securitisation undertaking, valued at any time taking into account the hedging from which it benefits, in respect of drawings on a loan granted or the acquisition of receivables arising from drawings on loans, forward financial instruments, guarantees or risk or cash sub-participation may not exceed the value of its assets and, where applicable, the uncalled amount of subscriptions.
