FRANCE Law and Practice Contributed by: Hubert de Vauplane and Hugo Bordet, Morgan Lewis & Bockius LLP
providers if they collect funds on behalf of their clients.) This regime will remain in effect until 30 June 2026. During this 18-month grandfathering period, DASPs already reg - istered or licensed in France will be able to continue operating. New DASPs will have to obtain MiCAR-compliant authorisation (pro - vided for in Article L. 54-10-7 of the French Monetary and Financial Code). From 1 July 2026, the framework established by MiCAR will progressively apply, ultimately requiring crypto-assets companies to obtain a CASP authorisation from the AMF to operate. 2.3 Compensation Models Generally speaking, regulated actors are required to provide various information to their potential customers before entering into a relationship with them, even more so when their customer is an individual who is acting for purposes which are outside his or her commercial activity (ie, a consumer). This information must include the fee structure of the service provider. Most regulated actors are also subject to rules on conflicts of interest which may affect their compensation structure. More specifically, the main limitations regarding fees charged to customers apply to the follow - ing verticals: • Banks and neobanks – the overdraft fees which may be charged by a bank are subject to a legal limitation. Since 1 November 2020, and due to the COVID-19 crisis, financially fragile people have benefited from the cap - ping of payment incident fees at EUR25 per month for a period of three months. • CASPs, ISPs and asset managers are sub - ject to strict rules (notably arising from the Markets in Financial Instruments Directive II, MiFID II) regarding their compensation and
their ability to earn fees from third parties by executing trades on behalf of clients or recommending that they invest in specific financial instruments. In any case, even when their pricing structure is unregulated, most fintech start-ups voluntarily disclose their fees on their website or in their general terms and conditions. 2.4 Variations Between the Regulation of Fintech and Legacy Players Legacy Players The activities of legacy players (including credit institutions, insurance undertakings and ISPs) are based on traditional banking operations and insurance or investment services and prod - ucts, which are governed mainly by the CRD IV, Solvency II and MiFID II frameworks (both the regulations and the transposition of the direc - tives into French law). These regulations relate in particular to the capital, internal organisation and resources requirements which are expect - ed to be fulfilled by entities likely to present a systemic risk, especially within the eurozone. In return, legacy players benefit from a monopoly on the regulated activities subject to the above- The businesses of fintech companies are not comparable to those of legacy players. A lot of these businesses do not qualify as banking operations or insurance or investment services. Some of these businesses are not even regulat - ed (ie, regtech companies). Therefore, provided that their businesses do not qualify as regulated activities, fintech companies will not be subject to the heavy regulations applicable to legacy players. mentioned directives. Fintech Companies
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