#2021-1652Order No. 2021-1652 of December 15, 2021 on EU Law Adaptations in Information Obligations and Financial Product Governance
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This law adapts French regulations to align with EU standards regarding information obligations and investor protections in financial markets. It affects professionals handling financial communications and derivative transactions by setting out new communication standards and position limits. Companies need to ensure they comply with new rules surrounding digital communication with clients and adhere to position size limits to prevent market abuse.
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Key Changes
- New rules for digital communication with financial clients, emphasizing suitability and accessibility.
- Position limits introduced for derivatives on critical commodities to prevent market abuse.
- Exceptions are defined for certain financial and non-financial entities under specific conditions.
Obligations
What this law requires
Financial professionals must verify in advance that any durable medium (non-paper) chosen for client communications is appropriate for the client's situation and that the client is able to access information and documents on that medium before using it.
The Autorité des marchés financiers (AMF) must establish and apply position size limits on net positions that persons can hold at any time for agricultural commodity derivatives, critical/significant commodity derivatives, and economically equivalent OTC contracts traded on trading venues.
Position limits must be applied on an aggregated basis across all positions held by a person and positions held in that person's name at group level to prevent market abuse and ensure orderly pricing and efficient settlement.
The AMF must notify the European Securities and Markets Authority (ESMA) of the position limits it intends to fix and must modify those limits or provide written justification if ESMA renders a negative opinion.
When the AMF imposes position limits that differ from ESMA's opinion, it must immediately publish a detailed public statement on its website explaining the reasons for the divergence.