French Monetary and Financial Code
In forceI.-Pursuant to IX of Article L. 613-44, a subsidiary that is not a resolution entity may be exempted from compliance with the requirement set out in IV of the same article if the following conditions are met:
1° The subsidiary and the resolution entity are established in France and are part of the same resolution group;
2° The resolution entity complies with the minimum requirement set out in I of Article L. 613-44; 3° There are no significant, proven or foreseeable legal or practical obstacles to the rapid transfer of own funds or the rapid repayment of liabilities by the resolution entity. 613-44;
3° There is, legally or in practice, no significant, proven or foreseeable obstacle to the rapid transfer of own funds or the rapid repayment of liabilities by the resolution entity to the subsidiary whose failure has been determined in accordance with 1° of I of Article L. 613-48, including when the resolution entity is subject to a resolution measure;
4° The risks of the subsidiary are negligible or the resolution entity has given the supervisory board all guarantees concerning the prudent management of the subsidiary and has declared, with the agreement of the same board, that it will guarantee the commitments entered into by this subsidiary;
5° The risk assessment, measurement and control procedures of the resolution entity are applied to the subsidiary;
6° The resolution entity holds more than 50% of the voting rights attached to shares in the capital of the subsidiary or has the right to appoint or remove the majority of the members of the administrative, management or supervisory bodies of the subsidiary.
II.Pursuant to IX of Article L. 613-44, the exemption of a subsidiary that is not a resolution entity from compliance on an individual basis with the requirement mentioned in I of the same article may also be decided when the following conditions are met:
1° The subsidiary and its parent undertaking are established in France and are part of the same resolution group, but the resolution entity is established in another Member State;
2° The parent undertaking complies, on a consolidated basis, with the minimum requirement for own funds and eligible instruments mentioned in III of Article L. 613-44;
3° There is, legally or in practice, no significant actual or foreseeable obstacle to the rapid transfer of own funds or repayment of liabilities by the parent undertaking to the subsidiary whose default has been established in accordance with 1° of I of Article L. 613-48, including where the resolution entity is the subject of a resolution measure;
4° The risks of the subsidiary are negligible or the parent undertaking has given the supervisory board all guarantees concerning the prudent management of the subsidiary and has declared, with the agreement of the supervisory board, that it will guarantee the commitments entered into by the subsidiary;
5° The risk assessment, measurement and control procedures of the parent undertaking are applied to the subsidiary;
6° The parent undertaking holds more than 50% of the voting rights attaching to shares in the capital of the subsidiary or has the right to appoint or remove the majority of the members of the administrative, management or supervisory bodies of the subsidiary.
III.Where 2° of V of Article L. 613-44 applies, the resolution board may exempt, pursuant to IX of the same article, a central body mentioned in Article L. 511-30 or one of its affiliates which are not resolution entities, from complying on an individual basis with the minimum requirement where the following conditions are met:
1° The affiliate and the central body are established in France, are part of the same resolution group and are subject to supervision by the Autorité de contrôle prudentiel et de résolution;
2° The commitments of the central body and the affiliates constitute joint and several commitments, or the commitments of the affiliates are fully guaranteed by the central body;
3° The minimum capital requirement and eligible commitments, the solvency and liquidity of the central body and of all the members on a permanent basis are monitored in their entirety on the basis of the consolidated accounts of these institutions;
4° In the case of an exemption granted to an affiliate, the management of the central body is authorised to give instructions to the management of the institutions permanently affiliated to it;
5° The resolution group concerned complies with the minimum requirement mentioned in 1° of V of Article L. 613-44 ;
6° In the event of resolution, there is, legally or in practice, no known or foreseeable significant obstacle to the rapid transfer of own funds or the rapid repayment of liabilities between the central body and the affiliates.
