French Monetary and Financial Code
In forceI. - When implementing a resolution measure, the College of Resolution shall take into account the objectives of the resolution. These objectives are as follows:
1° To ensure the continuity of critical functions ;
2° Avoid significant negative effects on financial stability; and
3° Protect the resources of the State by reducing as far as possible recourse to exceptional public financial aid;
4° Protect customer funds and assets, in particular those of depositors covered by the guarantee instituted in application of 1° of II of article L. 312-4 and investors covered by the guarantee instituted in application of 3° of II of article L. 312-4.
II. - When taking a resolution measure with regard to a person mentioned in I of Article L. 613-34, the resolution board shall ensure compliance with the following provisions:
1° Resolution measures shall first affect the holders of equity securities referred to in Chapter II of Title I of Book II or other ownership securities up to the amount of the own funds instruments they hold and, secondly, creditors in the order of priority of their claims. None of these security holders or creditors may incur losses greater than those they would have incurred in the context of a compulsory liquidation under Book VI of the Commercial Code;
2° The persons mentioned in Article L. 511-13 or 4 of Article L. 532-2, the board of directors, the supervisory board or any other body exercising equivalent supervisory functions of the person subject to a resolution procedure shall be replaced, except in cases where their continuation is deemed necessary by the resolution college to achieve the objectives of the resolution;
3° A resolution measure is implemented without prejudice to the rules of ordinary law relating to the civil and criminal liability of natural or legal persons;
4° Unless otherwise provided for in this sub-section, creditors ranking pari passu are treated equally;
5° Deposits guaranteed under the conditions set out in 2° of Article L. 312-16 are fully protected.
III. - Where a credit institution or an investment firm is part of a group, the resolution college implements the resolution measures in such a way as to minimise their impact on the other entities of the group and on the group as a whole.
IV. - When the collège de résolution implements one or more of the resolution measures mentioned in sub-paragraphs 3, 4 and 5 of this paragraph having the effect of replacing employers, the provisions of Article L. 1224-2 of the French Labour Code are not applicable.
V. - When the implementation of a resolution measure mentioned in this paragraph has not given rise to prior information or consultation of the works council under the conditions set out inarticle L. 2323-2 of the French Labour Code, this body is convened by the employer as soon as possible.
