#2020-1635Ordinance No. 2020-1635 Adjusting Financial Legislation in Line with EU Law
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This ordinance modifies France's financial laws to better align with European Union regulations. It emphasizes the need for businesses to maintain prudent management and complete documentation for the authorization process and confirms the refusal of authorization if businesses do not meet these criteria. It also introduces new rules for determining and managing capital buffers and includes additional requirements for certain financial institutions, especially those systematically important within the EU.
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Key Changes
- Refusal of authorization if criteria are not met
- New rules for capital buffers
- Additional requirements for significant financial institutions
Obligations
What this law requires
Financial institutions must submit complete documentation including: activity program indicating parent companies and holding companies if part of a group; organization, procedures, policies and practices per Article L. 511-55; remuneration policy based on equal pay principle per Article L. 511-71; technical and financial means; identity and participation amounts of capital providers; and evidence of capital providers' appropriateness per Article L. 511-12-1.
Financial institutions must establish and maintain all devices, procedures, policies and practices specified in Article L. 511-55 and a remuneration policy founded on the principle of equal pay in accordance with Article L. 511-71 before authorization.
Authorization shall be refused if capital providers are deemed inappropriate under Article L. 511-12-1 criteria and cannot guarantee prudent management, or if submitted information is incomplete.
Credit institutions must maintain compliance with prudential requirements stated in parts three, four, and six of EU Regulation 575/2013 (excluding articles 92 bis and 92 ter) and additional capital requirements imposed per Article L. 511-41-3.
Authorization may be withdrawn by ECB if establishment: obtained authorization through false declarations; fails to meet prudential requirements; fails to maintain additional capital requirements; no longer meets authorization conditions; or has not exercised authorization within 12 months or ceased operations for 6+ months.