FRANCE Law and Practice Contributed by: Hubert de Vauplane and Hugo Bordet, Morgan Lewis & Bockius LLP
In addition, there is no legal definition of fintech under French law (nor under European law). The ACPR defined fintech as “start-up projects that generally combine (i) a high degree of innova- tion and (ii) a service offer in one or more finan - cial areas under the supervision of the ACPR. The innovation component may encompass a product, a process, a marketing technique or an organisational innovation based on the use of new technologies.” Fintech companies do not constitute a homogeneous category of service providers; therefore, a case-by-case approach – based on the service provided – must be fol - lowed in order to compare the regulations appli - cable to legacy players and fintech companies. 2.5 Regulatory Sandbox Although French regulators do not plan to establish any regulatory sandbox, the French regulatory approach is based on proportionality and relies on setting out tailor-made regulatory frameworks inspired by legacy regulations but proportionate to the activities of fintech com - panies (so-called “sandboxes” ). For example, token issuers and DASPs benefit from a specific legal regime which is inspired by legacy regula - tions (such as MiFID II) but is not merely a regu - latory sandbox. Both French regulators have also created inter - nal teams dedicated to fintech actors, the pur - pose of which is to help fintech entrepreneurs navigate complex regulatory issues. The publication by the ACPR of the charter for the appraisal of fintech authorisation requests on 6 January 2022 illustrates this commitment to supporting fintech projects. 2.6 Jurisdiction of Regulators Traditional players are authorised and supervised by the AMF and the BdF, through the ACPR,
depending on the services they provide (bank - ing, investment or insurance services). Broadly summarised, the AMF is in charge of protecting consumers that invest in financial instruments, while the ACPR is in charge of preserving the stability of the financial and banking system. The precise allocation of responsibilities is complex: eg, an ISP is authorised by the ACPR, but its programme of activity must be approved by the AMF. Once the ISP is authorised, the ACPR monitors the entity’s activities and financial sit - uation, while the AMF monitors its compliance with the applicable code of conduct. Similarly, the AMF is the authority that grants registration to DASPs, while the ACPR is in charge of validat - ing the applicant’s AML procedure. 2.7 No-Action Letters French regulators do not have the authority to issue no-action letters. At the European level, only the EBA and ESMA are empowered to adopt such measures, enabling them to issue specific recommendations to the European Commission regarding the application of certain rules when their enforcement threatens market stability, weakens the EU’s competitiveness or undermines investor protection. A recent example is the European Commission’s 2024 request for the EBA to explore the issu - ance of a no-action letter concerning the inter - play between MiCAR and the revised Payment Services Directive (PSD2). This request aims to address potential regulatory overlaps affecting EMTs and mitigate the administrative burden on CASPs during the transitional period before the implementation of PSD3. However, this regulatory prerogative remains a limited instrument to resolve legal impasses stemming from inapplicable provisions or those requiring international co-ordination, as it does
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