FinTech Newsletter No 4
06 January 2023
06 January 2023
On 15 September 2022, Order no. 2022-1229 (accessible here in French) and Decree no. 2022-1230 (accessible here in French) extended by a further 12 months the transitional period for firms authorized to provide crowdfunding services in accordance with French law (see our FinTech Newsletter #3 here), in line with the European Commission decision of 12 July 2022. The new deadline will now fall on 10 November 2023.
The AMF General Regulation was also updated following an implementing Decree of 10 November 2022 (accessible here in French) to reflect the extension of this transitional period.
The ACPR published on November 2022 the sector-specific principles of application of AML-CFT requirements for Digital Asset Service Providers (accessible here in French); an explanatory document that aims to facilitate the implementation by DASP of their AML-CFT measures by setting out the expectations of the ACPR and Tracfin (the French financial intelligence unit).
In particular, the document provides information on:
#PilotRegimeRegulation #DLTmarket infrastructures
On 23 November 2022, the French Government filed with the French Senate a Bill ensuring compliance with European Union Law (Projet de loi DDADUE) (accessible here in French), which includes an Article 5 on the adaptation of financial securities law to market infrastructures based on distributed ledger technology (DLT).
Since the Order of 8 December 2017 on DLT, French law allows unlisted financial securities to be registered on DLT, yet French securities law is still to be amended to ensure full compliance of French law with the provisions of Regulation (EU) 2022/858 of 30 May 2022 on a pilot regime for market infrastructures based on DLT.
The Bill is still under discussion before the French National Assembly.
As part of the European Commission’s work on an open finance framework, the AMF published on 20 December 2022 a position paper presenting is proposals for opening financial data on investors (accessible here in English).
In this position paper, the AMF expresses the following views:
#DASPs #fitandproper #licence
The AMF published on 21 December 2022 an update of its guidance on Digital Asset Service Providers, in particular the Q&A on the digital asset service providers regime (DOC 2020-07 accessible here in French).
The guidance tackles the following topics:
On 23 December 2022, the AMF reminded platforms proposing investments in real estate as “royalties” of the regulation applicable to them (accessible here in French) and warned investors against the risks associated with these investments (accessible here in English).
In essence, the AMF considers that:
In addition, in the public warning, the AMF stresses that:
On 7 September 2022, the French Treasury published a report (accessible here in French) on the development of insurance on cyber risks. Cyber risk covers all risks related to the use of digital technologies. It is an operational risk concerning the confidentiality, integrity or availability of data and information systems, resulting from human and unintentional error as well as voluntary IT maliciousness. While the growing cost of cyber attacks is creating a need for insurers to cover cyber risks, the cyber risk insurance market is struggling to emerge, notably due to insufficient market structuring.
The French Treasury sets out a series of recommendations to:
In parallel, at the EU level the European Commission’s legislative proposal “Digital Operational Resilience Act” (DORA) aims at creating a harmonized framework across the financial sector by requiring financial entities to manage cyber-risks in a robust and effective way.
27 September 2022
On 27 September 2022, for the first time the AMF announced the withdrawal of a digital asset service provider (DASP) registration, with immediate effect (the decision is available here in French). The withdrawal of the DASP registration followed an on-site inspection carried out by the ACPR revealing:
The AMF now keeps a list of delisted DASP on its website, along with the reasons for delisting. Under French law, the AMF may, with the ACPR approval, withdraw a DASP registration (i) when the DASP no longer complies with the requirements associated with its registration, (ii) where the DASP has not started its activity within a period of twelve months after its registration or has no more activity for at least six months or (iii) at the initiative of the DASP, if it ceases its activity.
The second edition of the French FinTech Week, was held from 14 to 21 October 2022 (more information accessible here).
Notable events include:
On 29 November 2022, the Bank of France and the Central Bank of Luxemburg jointly assisted the European Investment Bank (EIB) in the Venus transaction (the press release is accessible here in English). The Venus transaction consisted in a 100 million EIB digital native bond issuance under Luxembourg law on a DLT operated by Goldman Sachs Bank Europe (GSBE). Subscriptions were settled through a distinct DLT operated jointly by the Bank of France and the Central Bank of Luxemburg on which they issued and distributed digital representations of euro denominated central bank money in the form of tokens which can be described as an experimental Central Bank Digital Currency (CBDC).
Authors: Hubert Blanc-Jouvan, Partner ; Agathe Motte, Partner ; Maxime Gandibleux, Counsel ; Aurélien Fournier-Her, Counsel ; Francesco Assi, Senior Associate ; Oriane Lemesle, Associate ; Lucien Jarry, Associate