French Monetary and Financial Code
In forceI. - When, at the end of the assessment provided for in I of Article L. 613-41, the resolution board, after obtaining the opinion of the supervisory board, finds that there are significant obstacles to a credit institution or an investment firm being wound up or being subject to resolution measures under the conditions mentioned in I of Article L. 613-41, it shall notify the person concerned, the supervisory board and, where applicable, the resolution authorities responsible for branches of significant importance, in writing of this finding.
II. - Within four months of this notification, the person concerned shall propose to the resolution college measures to reduce or eliminate the obstacles identified. The collège de résolution decides on these measures after receiving the opinion of the collège de supervision.
IIa.The deadline set in II for the person concerned is reduced to two weeks where the significant obstacles mentioned in I are due to the fact that:
1° The person concerned meets the overall capital buffer requirement where this is in addition to each of the requirements set out in X of Article L. 511-41-1-A, but does not meet this overall requirement when it is added to the requirement set out in 1° of I of Article L. 613-44;
2° The person concerned meets neither the requirements set out in Articles 92a and 494 of Regulation (EU) No 575/2013 nor the requirement set out in Article L. 613-44.
In the two cases mentioned above, the person concerned shall propose measures to ensure that it complies with the requirement set out in Article L. 613-44 and the overall capital buffer requirement. It shall also propose to the resolution college a timetable for the implementation of these measures, which shall be drawn up taking into account the factors at the root of the significant obstacles.
IIb - The resolution college, after receiving the opinion of the supervisory college, shall assess whether the measures proposed under II or IIa effectively reduce or eliminate the significant impediments in question.
III. - Where the collège de résolution considers that the measures proposed under II or IIa do not make it possible to reduce or remove the obstacles reported, it may, after consulting the collège de supervision and, where the stability of the financial system is at stake, the Haut Conseil de stabilité financière, take any necessary measure within a timeframe it shall set, and in particular:
1° Order the person concerned to review the financing arrangements within the group, to enter into service contracts, within the group or with third parties, to ensure the performance or supply of critical functions ;
2° Enjoin the person concerned to limit the maximum individual and aggregate exposure;
3° Impose additional ad hoc or regular reporting obligations for resolution purposes;
4° Order the person concerned to dispose of certain assets;
5° Order the person concerned to limit or interrupt certain current or planned activities;
6° Restricting or prohibiting the development of new or existing activities or the sale of new or existing products by the person concerned;
7° Enjoin the person concerned or an entity that it directly or indirectly controls to modify its legal or operational structures in order to reduce complexity and to allow, in the event of application of resolution measures, the legal and operational separation of critical functions from other functions;
8° Instruct the person concerned or a parent undertaking, within the meaning of I of Article L. 511-20, to set up a parent financial holding company in a Member State or a parent financial holding company in the European Union;
9° Enjoin the person concerned to issue eligible commitments to meet the requirements laid down in Article L. 613-44;
10° Direct the relevant person to take other measures to meet the minimum capital and eligible commitment requirements, including seeking to renegotiate any eligible commitment, additional Tier 1 capital instrument or Tier 2 capital instrument that it has issued;
11° If the person concerned is a subsidiary of a mixed-activity holding company, direct that mixed-activity holding company to create a separate financial holding company to control that person provided that this is necessary to facilitate the resolution of that person and to prevent the adverse effects of the resolution measures on the non-financial entities in the group.
12° Order the person concerned to submit a plan for compliance with the requirements of Article L. 613-44 and, where applicable, with the overall capital cushion requirement;
13° Enjoin the person concerned to modify the maturity structure of its own funds instruments, after having obtained the agreement of the supervisory board, and of its eligible commitments in order to ensure that it permanently meets the requirements set out in Article L. 613-44 ;
Before taking any of the measures mentioned above, the resolution board shall set out the reasons why it considers that the measures proposed by the person concerned do not remove the obstacles identified and why the measures it proposes are proportionate to this objective. The college shall take into account the potential effect of the measures it intends to take on the person concerned, in particular on its business, stability and ability to contribute to the financing of the economy, on the European financial services market, on financial stability in other Member States and in the Union as a whole.
Within one month of notification of the measures taken pursuant to this III, the person concerned shall propose to the resolution college a plan enabling it to comply with the measures.
IV. - Where the resolution college has made the notification provided for in I, it shall defer the adoption of the individual or group preventive resolution plan relating to the person concerned until the approval of the corrective measures proposed by that person pursuant to II or until the adoption of the measures provided for in III.
V. - Where the Single Resolution Board instructs it to take a decision to reduce or remove the impediments reported pursuant to Article 10 of Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014, the resolution college shall adopt one or more of the measures provided for in 1° to 10° of III of this Article.
Within thirty days of notification of the measures taken pursuant to this V, the person concerned shall submit to the resolution college a plan enabling it to comply with them. The College of Resolution shall forward this plan to the Single Resolution Board without delay.
