French Monetary and Financial Code
In forceI. - The following are subject to the obligation to draw up and maintain a preventive recovery plan:
1° Credit institutions subject to direct supervision by the European Central Bank pursuant to Article 6(4) of Council Regulation (EU) No 1024/2013 of 15 October 2013 and credit institutions or investment firms which constitute a significant part of the financial system within the meaning of Article 11(8) of Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014 ;
2° Credit institutions and investment firms that are not part of a group subject to supervision on a consolidated basis within the meaning of Article L. 613-20-1 ;
3° EU parent undertakings;
4° Where applicable, by decision of the supervisory board or, where applicable, by joint decision provided for in Articles L. 613-37 and L. 613-37-1, credit institutions and investment firms when they are subsidiaries of one of the persons mentioned in 3°.
The central bodies mentioned in Article L. 511-30 , on the one hand, and the credit institutions and investment firms affiliated to them and their subsidiaries, on the other hand, are respectively parent undertakings in the Union within the meaning of 3° above and subsidiaries mentioned in V.
The persons mentioned in 1° which are not part of a group, 2° and 4° shall draw up preventive recovery plans on an individual basis.
The persons mentioned in 3° draw up group preventive recovery plans.
II. - The level of the obligations of the persons mentioned in 1° to 4° of I under this article is set by the supervisory board, taking into account the factors mentioned in the first paragraph of Article L. 613-34-2 as well as any negative impact that their failure and liquidation pursuant to Book VI of the Commercial Code might have on the financial markets, on other credit institutions or investment firms, on financing conditions or on the economy as a whole.
The supervisory board may authorise the persons mentioned in 2° and 4° of I to draw up a preventive recovery plan using simplified procedures, provided that such authorisation does not constitute an obstacle to implementing the measures mentioned in Articles L. 511-41-3, L. 511-41-5, L. 612-32, L. 612-33, L. 612-34, L. 612-34-1, V of Article L. 613-36 and sub-sections 4, 9 and 10 of this section. It may withdraw this authorisation at any time.
III. - The supervisory board may decide to exempt the members of the same institutional protection scheme referred to in paragraph 7 of Article 113 of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 from the obligation to draw up an individual preventive recovery plan and to subject the scheme manager to the obligations of this sub-section relating to group preventive recovery plans. The system manager shall fulfil these obligations in cooperation with each of the exempt members.
For the purposes of this subsection, the system operator is considered to be the parent undertaking of the members of the system.
IV. - Individual preventive recovery plans provide for a wide range of recovery measures to deal with a significant deterioration in the financial situation of the persons concerned.
V. - Group preventive recovery plans shall cover the whole group and shall provide for a wide range of recovery measures that EU parent undertakings or their subsidiaries may take in the event of a significant deterioration in the financial situation of the group or of the credit institutions or investment firms in the group.
They shall provide for arrangements to ensure the coordination and consistency of measures taken at the level of the relevant person referred to in 3° and 6° of I of Article L. 613-34, as well as measures taken at the level of subsidiaries and, where applicable, at the level of branches of significant importance.
VI. - The individual or group preventive recovery plan provides for the measures that would ensure the recovery of the entities concerned in the event of a crisis. It shall take into account the specific situation of credit institutions and investment firms or of the group to which they belong. It shall ensure that adverse effects on the financial system are avoided or minimised, including in the event that other credit institutions, investment firms or groups may implement their own plans during the same period.
It includes appropriate conditions and procedures to ensure the rapid implementation of the identified recovery measures.
It envisages several scenarios of serious macroeconomic and financial crisis depending on the particular situation of the person concerned or the group, including events of systemic importance and crises specific to the person concerned or the group.
The plan shall define a number of indicators on the basis of which it will be decided whether to implement the recovery measures provided for in IV or V.
It shall include, where applicable, the elements provided for in the group financial support agreements referred to in Article L. 613-46.
It specifies, where applicable, the conditions under which the entity may have recourse to central bank facilities and the nature of the assets that may be provided as collateral in this case.
It sets out the measures that may be taken by the entity if the conditions for early intervention within the meaning of Article L. 511-41-5 are met.
It includes procedural and other provisions to ensure the rapid implementation of recovery measures, as well as a range of options regarding the measures to be implemented.
It does not take into account any possibility of exceptional public financial support.
The content, frequency and conditions for updating an individual or group preventive recovery plan are specified by an order of the Minister for the Economy.
VII. - Subject to the second paragraph of II, preventive recovery plans are updated at least once a year or after each change in the legal structure of the persons and entities concerned, their organisation, their activity or their financial situation likely to have a significant effect on the plan. In addition, the college of supervisors may require more frequent updates from these persons and entities.
The preventive recovery plan shall be submitted for adoption and each time it is amended, for approval by the board of directors, the supervisory board or any other body exercising equivalent supervisory functions of the person responsible for drawing up the plan, prior to its transmission to the college of supervisors.
The plan shall be submitted as soon as possible. The plan shall be accompanied by any evidence that it meets the requirements of IV, V and VI and that it is likely to maintain or restore the viability and financial situation of the persons concerned or of the group to which they belong.
