Subsection 2: Financial conglomerates

For the purposes of the supplementary supervision provided for in Chapter III of Title III of Book VI, the following definitions shall apply

1° Regulated entity :

a) A credit institution referred to in Article L. 511-1 ;

b) A company referred to in Article L. 310-1 of the Insurance Code, a mutual insurance company or a union governed by Book II of the Mutual Insurance Code or a provident institution or a union governed by Title III of Book IX of the Social Security Code, or a company with its registered office in another Member State of the European Union, in another State party to the Agreement on the European Economic Area or outside the European Economic Area and which, if its registered office were located in France, would be required to obtain authorisation in accordance with Article L. 321-1 of the Insurance Code, Article L. 931-4 of the Social Security Code or Article L. 211-8 of the Mutual Code;

c) A company mentioned in 1° of III of Article L. 310-1-1 of the Insurance Code, a mutual insurer or a union mentioned in II of Article L. 111-1-1 of the Mutual Code or a provident institution or a union mentioned in II of Article L. 931-1-1 of the Social Security Code, a securitisation vehicle mentioned in Article L. 310-1-2 of the French Insurance Code, or a company whose registered office is located in another Member State of the European Union, in another State party to the Agreement on the European Economic Area or outside the European Economic Area and which, if its registered office were located in France, would be required to obtain authorisation in accordance with Article L. 321-1-1 of the French Insurance Code, Article L. 931-4-1 of the French Social Security Code or Article L. 211-8-1 of the French Mutual Code;

d) An investment firm mentioned in Article L. 531-4, a portfolio management company or a company with its registered office in another Member State of the European Union, in another State party to the Agreement on the European Economic Area or outside the European Economic Area and which, if its registered office were located in France, would be required to obtain authorisation in accordance with I of Article L. 532-1 or Article L. 532-9 ;

e) A supplementary occupational pension fund mentioned in Article L. 381-1 of the Insurance Code, a supplementary occupational pension mutual mentioned in Article L. 214-1 of the Mutual Code, or a supplementary occupational pension institution mentioned in Article L. 942-1 of the Social Security Code;

2° Sectoral rules: rules concerning the prudential supervision of regulated entities in each financial sector;

3° Financial sector: a sector composed of one or more entities belonging to the following sectors:

a) The banking sector, which comprises :

-the credit institutions mentioned in Article L. 511-1 ;

-the financial institutions mentioned in article L. 511-21 , paragraph 4; or

-ancillary services undertakings within the meaning of Article 4(1)(18) of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013, the head office of which is located in a Member State of the European Union or in another State party to the Agreement on the European Economic Area ;

b) The insurance sector, which includes:

-the companies mentioned in article L. 310-1 of the Insurance Code, the mutual insurance companies or unions governed by Book II of the Mutual Insurance Code or the provident institutions or unions governed by Title III of Book IX of the Social Security Code, or the companies with their registered office in another Member State of the European Union or in another State party to the Agreement on the European Economic Area and which, if their registered office were located in France, would be required to obtain authorisation in accordance with article L. 321-1 of the Insurance Code,article L. 931-4 of the Social Security Code or article L. 211-8 of the Mutual Code;

insurance group companies referred to in 1° of article L. 322-1-2 of the French Insurance Code; - mutual group associations referred to in 1° of article L. 322-1-2 of the French Insurance Code;

-the group mutual insurance associations referred to in article L. 111-4-2 of the French Mutual Code

-the companies mentioned in 1° of III of article L. 310-1-1 of the French Insurance Code, the mutual insurers or unions mentioned in II of article L. 111-1-1 of the French Mutual Code or the provident institutions or unions mentioned in II ofarticle L. 931-1-1 of the French Social Security Code, the securitisation vehicles mentioned in article L. 310-1-2 of the French Insurance Code, or companies having their registered office in another Member State of the European Union or in another State party to the Agreement on the European Economic Area and which, if their registered office were located in France, would be required to obtain authorisation in accordance with article L. 321-1-1 of the French Insurance Code, article L. 931-4-1 of the French Social Security Code or article L. 211-8-1 of the French Mutual Code;

-sociétés de groupe assurantiel de protection sociale (social protection insurance group companies) referred to in article L. 931-2-2 of the French Social Security Code;

-the supplementary occupational retirement funds mentioned in article L. 381-1 of the French Insurance Code, the supplementary occupational retirement mutuals or unions mentioned in article L. 214-1 of the French Mutual Code, and the supplementary occupational retirement institutions mentioned in article L. 942-1 of the French Social Security Code;

c) The investment services sector, which includes the investment firms mentioned in Article L. 531-4, other than those authorised exclusively to provide one or more of the investment services mentioned in 1, 2, 4 and 5 of Article L. 321-1 and which are not authorised to hold customer funds or securities, or undertakings having their registered office in another Member State of the European Union or in another State party to the Agreement on the European Economic Area which, if their registered office were located in France, would be required to obtain authorisation in accordance with I of Article L. 532-1 ;

4° Competent authority: the Autorité de contrôle prudentiel et de résolution, the Autorité des marchés financiers or any national authority of another Member State of the European Union or of another State party to the Agreement on the European Economic Area empowered by law or regulation to supervise, individually or at group level, one or more of the following categories of regulated entities:

a) Credit institutions ;

b) Undertakings having their registered office in another Member State of the European Union or in another State party to the Agreement on the European Economic Area which, if their registered office were located in France, would be required to obtain authorisation in accordance with Article L. 321-1 of the Insurance Code, Article L. 931-4 of the Social Security Code or Article L. 211-8 of the Mutual Code;

c) Companies having their registered office in another Member State of the European Union or in another State party to the Agreement on the European Economic Area which, if their registered office were located in France, would be required to obtain authorisation in accordance with I of Article L. 532-1 or Article L. 532-9 ;

d) Undertakings having their registered office in another Member State of the European Union or in another State party to the Agreement on the European Economic Area which, if their registered office were located in France, would be required to obtain authorisation in accordance with Article L. 321-1-1 of the Insurance Code, Article L. 931-4-1 of the Social Security Code or Article L. 211-8-1 of the Mutual Code;

5° Competent authority concerned :

a) Any competent authority responsible for the consolidated sectoral supervision of regulated entities belonging to a financial conglomerate, including the ultimate parent undertaking of a sector ;

b) The coordinator designated in accordance with Article L. 633-2, if different from the authorities mentioned in a ;

c) The other competent authorities, at the discretion of the authorities mentioned in a and b. Until the entry into force of any technical regulatory standards adopted by the European Supervisory Authorities, this assessment shall take into account in particular the market share held by the regulated entities of the financial conglomerate in other Member States, especially if it exceeds 5%, as well as the importance within the financial conglomerate of any regulated entity established in another Member State;

6° Parent undertaking: an undertaking which has exclusive control, within the meaning of Article L. 233-16 of the Commercial Code, over one or more other undertakings, or which, in the opinion of the competent authorities, exercises over them a dominant influence by virtue of the existence of substantial and lasting links of solidarity resulting from financial commitments, shared management or shared services;

7° Subsidiary undertaking: an undertaking over which exclusive control is exercised within the meaning of Article L. 233-16 of the Commercial Code or, in the opinion of the competent authorities, a dominant influence is exercised by virtue of the existence of substantial and lasting links of solidarity resulting from financial commitments, shared management or shared services. A subsidiary of a subsidiary is considered to be a subsidiary of the parent undertaking which is at the head of these undertakings;

8° Participation: a participation is the direct or indirect holding of at least 20% of the voting rights or capital of an undertaking, or a combination of rights in the capital of an undertaking which, by creating a lasting link with it, is intended to contribute to the company's activity;

9° Control: the relationship between a parent undertaking and a subsidiary undertaking, as defined in 6° and 7°, or a similar relationship between a natural or legal person and an undertaking;

10° Close links: a situation in which at least two natural persons or legal entities are linked by a control relationship or a shareholding, or a situation in which at least two natural persons or legal entities are permanently linked to the same third party by a control relationship;

11° Intra-group transactions: all transactions in which a regulated entity belonging to a financial conglomerate has direct or indirect recourse to other undertakings in the same group or to any natural or legal person linked to the undertakings in that group by close links for the performance of an obligation, whether contractual or not, and whether or not for consideration;

12° Concentration of risks: any exposure to risks with a loss potential large enough to jeopardise the solvency or overall financial position of the regulated entities in the conglomerate, whether that exposure arises from counterparty or credit risk, investment risk, insurance risk, market risk or other risks, or from a combination or interaction of such risks.