French Monetary and Financial Code
In forceI. - The assets referred to in II of article L. 214-168 are financial instruments, receivables or any other asset within the meaning of article L. 214-154, or risk or cash sub-participations.
Direct or indirect investment in one or more of the assets referred to in II of Article L. 214-168 may result from the issue of units, shares or debt securities, from the conclusion of contracts constituting forward financial instruments, or from recourse to borrowing or any other form of resources, debt or commitments.
The conditions under which a specialised financing body may issue debt securities are defined by decree. The General Regulation of the Autorité des marchés financiers sets the conditions for subscription, sale and redemption of units, shares or debt securities issued by a specialised financing vehicle.
Article L. 214-144 applies to the subscription and acquisition of units, shares or debt securities issued by a specialised financing vehicle. Units or shares may also be subscribed or acquired by investor managers, employees or natural persons acting on behalf of the management company of the undertaking, as well as by the management company itself.
II. - Under the conditions laid down by its regulations or articles of association, a specialised financing vehicle may subscribe to, acquire or hold equity, equity-related or quasi-equity instruments, in particular when these instruments are received by conversion, exchange or redemption of debt securities or securities giving access to capital or by the exercise of rights attached to such securities.
III. - By way of derogation from III of Article L. 214-168, a specialised finance vehicle may be managed by a management company with its registered office in another Member State of the European Union, authorised in accordance with Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 and authorised by its competent authority to manage AIFs.
IV. - In accordance with the conditions laid down in the general regulations of the Autorité des marchés financiers and specified in their regulations or articles of association, specialised finance undertakings may include different classes of units or shares.
The units or shares and debt securities issued by the specialised financing vehicle may give rise to different rights to capital and interest provided that the credit risk associated with the holding of these units, shares or debt securities is not subject to any subordination rule.
By way of derogation from II of Article L. 214-169 and under conditions set by decree, the units, shares and debt securities issued by the specialised financing vehicle may be redeemed by the vehicle at the request of the unit holders, shareholders or holders of debt securities, if its regulations or articles of association so provide. In this case, Article L. 214-170 does not apply to the issue of units or shares by the undertaking.
V. - A specialised finance vehicle may grant loans under the conditions laid down by Regulation (EU) No 2015/760 of the European Parliament and of the Council of 29 April 2015 on European long-term investment funds, where it has received authorisation to use the name "ELTIF" pursuant to the same Regulation.
A specialised financing body whose share redemptions and use of leverage are subject to restrictions may also grant loans to non-financial companies under the conditions and within the limits set by decree of the Conseil d'Etat. Loans granted in this way have a maturity of less than the residual life of the undertaking.
VI. - The maximum net loss or commitment taken by a specialised financing institution, assessed at any time taking into account the cover it has, in respect of drawings on a loan granted or the acquisition of receivables arising from drawings on loans, forward financial instruments, guarantees or risk sub-participation may not exceed the value of its assets and, where applicable, the uncalled amount of subscriptions.
VII - Under the conditions defined by the general regulations of the Autorité des marchés financiers, the portfolio management company representing a specialised financial institution shall entrust responsibility for centralising subscription and redemption orders for units, shares or debt securities vis-à-vis third parties either to the specialised financial institution, or to the custodian, or to a management company, or to an investment services provider authorised to provide one of the services mentioned in Article L. 321-1. The entity entrusted with this responsibility shall have suitable and sufficient resources to perform this function. A subscription or redemption order transmitted to the entity responsible for centralising orders is irrevocable, on the date and under the conditions defined by the General Regulations of the Autorité des marchés financiers.
VIII - The Autorité des marchés financiers shall define the conditions under which specialised financial undertakings shall inform investors and may be advertised, in particular by audiovisual means, or canvassed.
The articles of association or by-laws of specialised financing undertakings, as well as documents intended for the information of their unitholders, shareholders or debt security holders, shall be drawn up in French. However, under the conditions set by the general regulations of the Autorité des marchés financiers, they may be drawn up in a language other than French that is customary in financial matters.
IX - Under the conditions laid down by the general regulations of the Autorité des marchés financiers, the regulations or articles of association of specialised financing undertakings may reserve the subscription or acquisition of their units, shares or debt securities to no more than twenty investors or to a category of investors whose characteristics are precisely defined in the prospectus.
The custodian or the person designated for this purpose by the regulations or the articles of association of the specialised financing vehicle shall ensure that the subscriber or purchaser is an investor referred to in the first paragraph of this IX.
X.-Articles L. 214-24-57 to L. 214-24-61 apply to specialised financing undertakings. For the application of the provisions of the second paragraph of Article L. 214-24-58, the feeder specialised finance vehicle may suspend subscriptions or redemptions of its own units, shares or debt securities for a period identical to that of the master AIF or UCITS.
