French FinTech Newsletter No.6
18 September 2023
18 September 2023
#RTO #Crowdfunding #Investment Services
Decree no. 2023-813 of 22 August 2023 (accessible here in French), published on 24 August 2023 on the Official Journal of the French Republic, amends the definition of the RTO service (included in the French Monetary and Financial Code).
This new definition broadens the definition of the RTO service by removing the criterion that orders (in relation to financial instruments) must be transmitted to an investment services provider ("ISP") based in the EEA (or to an equivalent third-country entity).
The amendment aims to:
This decree came into force on 1 September 2023.
#DASP #Crypto #MiCA
Decree no. 2023-787 of 17 August 2023 (accessible here in French), published on 19 August 2023 amends the regulatory part of the French Monetary and Financial Code to adapt it to the 'enhanced' registration regime for DASP resulting from Article 8 of the so-called DDADUE Law (see point 9 of the French FinTech Newsletter no. 5).
In the same way, the Autorité des marchés financiers ("AMF") recently amended the provisions of its General Regulation and its policy on the DASPs regime (i) to take into account the 'enhanced' registration regime introduced by the DDADUE Law, but also (ii) to align the requirements applying to the DASPs licence (i.e. the optional regime) with those applying to the authorisation for crypto-asset service providers ("CASPs") under European Regulation on Markets in Crypto-Assets (“MiCA“), and (iii) to allow a fast-track procedure to be implemented towards CASP authorisation. A summary of such amendments is available here in English.
These provisions will come into force on 1 January 2024.
#Web3 #Cloud #Anti-scam
On 5 July 2023, a bill designed to "secure and regulate the digital space" in order to develop confidence in the ongoing digital transition (accessible here in French) was adopted by the French Senate. The bill is structured around four matters (citizens, children, businesses and communities, and democracy) detailing 12 measures.
These measures are notably designed:
The French National Assembly is now due to examine the bill in October 2023.
On 16 June 2023, the AMF published a new position (accessible here in English) setting out the requirements applicable to marketing communications issued by CSPs.
The purpose of this position is to specify the AMF’s expectations regarding the language and content of marketing communications issued by CSPs, relating to crowdfunding offers involving financial securities or loans in light of the Crowdfunding Regulation and the provisions of the French Monetary and Financial Code relating to crowdfunding.
#DASP #Crypto #MiCA
On 12 June 2023, the AMF published a press release (accessible here in French) to announced that MiCA was published in the Official Journal of the European Union on 9 June 2023. It will come into force on 29 June 2023.
The AMF reminds the key dates that service providers and market players should keep in mind :
#Influencers #Social Networks #Tokens
On 10 June 2023, the law no. 2023-451 aimed at regulating commercial influence and preventing abuses by influencers on social networks (accessible here in French) was published in the Official Journal of the French Republic.
In addition to defining influencer activity, the law introduces provisions into the French Monetary and Financial Code to better regulate and sanction risky offers promoted by influencers on social networks.
In particular, direct and indirect promotional activities can only be carried out by influencers with respect to:
#DLT #Pilot Regime
On 2 June 2023, the decree adapting French securities law to the EU DLT Pilot Regime regulation was published in the Official Journal of the French Republic.
It amends the regulatory part of the French Commercial Code and of the French Monetary and Financial Code to ensure that national law complies with the EU DLT Pilot Regime regulation.
The modifications are available here in French.
On 12 April 2023, the AMF, the Banque de France and the ACPR informed DLT market infrastructure project developers, on the entry points for filing their applications for specific permissions, exemptions and/or compensatory measures (accessible here in French).
Respectively on 4 May 2023 and 21 April 2023 (accessible in French here for AMF and here for ACPR), the AMF and the ACPR declared they would comply with the ESMA guidelines of 8 March 2023 on the standardized forms, formats and templates to be used to request authorization to operate a market infrastructure under the DLT Pilot Regime.
#Crypto #Ombudsman #Annual report
On 1 June 2023, Marielle Cohen-Branche, the AMF Ombudsman, presented her 2022 annual report at a press conference and talked about the main fields of intervention of the AMF Ombudsman, which notably covers crypto-assets.
In 2022, the mediation service received 54 cases relating to crypto-assets, 17 of which were admissible. The reasons for the cases were diverse, and included in particular computer incidents, hacking and incidents involving stablecoins, and earnings generated by transactions involving the immobilisation or lending of digital assets (staking, crypto-lending), etc.
The report is accessible here in French.
On 3 April 2023, the ACPR published an open consultation and discussion paper (accessible here in English) on DeFI. This document analyses the structure and risks of DeFI and its various components, as well as ideas for consideration for future regulations.
To avoid the pitfall of trying to replicate the existing regulatory framework only and exhaustively, the ACPR points out several avenues for regulation:
#CBDC #DLT #Experiments
On 21 July 2023, the Banque de France released a new report concerning its wholesale CBDC experimentation program, launched in March 2020, and comprising twelve experiments.
Thanks to these experiments, the Banque de France demonstrated the operational feasibility of the three models used for issuing CBDC directly on DLT, i.e., the interoperability model, the distribution model, and the integration model.
These three models have been tested with different types of DLT and for a wide range of use cases, covering two major strategic areas: the tokenization of finance and the enhancement of cross-border transactions.
Through these experiments, the Banque de France was able to draw strategic and technical lessons and to set out the next steps and objectives for the future, which include supporting the Eurosystem exploratory work and exploring the boundaries of cross-border payments.
The report is accessible here (in English).
On 18 July 2023, the French General Inspectorate of Finance (Inspection Générale des Finances) published a report about commercial tokens (i.e., tokens, fungible or non-fungible – NFT – that are sold as products or are associated with an act of sale of real products) in the French economy, their use cases and legal issues.
If the French public authorities wish to encourage the development of commercial tokens in the French economy, a number of issues need to be addressed in order to provide greater legal certainty for players and to control the associated risks. In particular:
The report is accessible here (in French).
#AML-CFT #Risk Analysis
On 29 June 2023, the ACPR published its SRA (accessible here in French), updating the last SRA published in 2019.
The SRA aims to provide guidance for the ACPR's anti-money laundering and AML-CFT supervisory activities and to make it easier for organisations to carry out their own AML-CFT risk assessments.
In particular, the ACPR:
As mentioned in the French FinTech Newsletter no. 5, the ACPR has announced, as part of its 2023 supervisory priorities, its intentions to carry out inspection campaigns targeting DASPs to ensure they comply with their AML-CFT requirements.
#Blockchain #DLT #Web3
In June 2023, the Institut Montaigne (which is a French think tank) published a report on blockchains (accessible here in French) to clarify their definition, nature, contours, use and concrete contributions.
The report also highlights France's role within the international blockchain ecosystem. It presents France's technical and regulatory strengths, as well as the 8 action levers that need to be developed to increase France's competitiveness and enable it to assert its European leadership in this field.
On 14 April 2023, the French Association for the Development of Digital Assets ("ADAN") published the new edition of its study on the level of adoption of digital assets by the general public and on the different uses of digital assets in different industries. The result of the study is accessible here (in French).
On 29 April 2023, the ADAN published a report (accessible here in English) on the challenge of DeFI regulation with its recommendations. The report considers the risks and challenges of DeFI, before giving the ADAN’s thoughts on building a framework of trust for users and project owners, while allowing effective supervision by the competent authorities in Europe.
From 6 to 20 October 2023, the third French Fintech Week will be held, organised by France FinTech (an association representing start-ups in the financial sector), Paris&Co, the ACPR and the AMF.
Various events will be held during the week, including the Fintech Cup 2023, a three-day regatta for fintech entrepreneurs, the INNN 2023, an event devoted to insurance issues organised by French Assurtech, the eighth FinTech R:Evolution 2023 and the ACPR-AMF Fintech Forum with conferences and workshops on the challenges of regulation and supervision.
The detailed program will be updated and is available here in French.
19 April 2023, no. 2022-02
The ACPR sanctioned a French payment institution with a reprimand (blâme) and a financial penalty of Euro 1,000,000 for a failure to comply with its obligations under the AML-CFT and freezing of assets regulations.
The decision is available here in French.