FRANCE Law and Practice Contributed by: Hubert de Vauplane and Hugo Bordet, Morgan Lewis & Bockius LLP
the same service to clients with lower financial capacity. 3.3 Issues Relating to Best Execution of Customer Trades Issues relating to best execution of orders sent by clients do not differ between legacy play - ers and robo-advisers. As a general principle, the services provided by robo-advisers qualify as investment services according to MiFID II (whether investment advice or portfolio man - agement). Consequently, robo-advisers must set out a best execution policy in relation to orders traded on behalf of their clients. The French regulatory framework for crowdlend - ing was created in 2014 with a new exemption to the banking monopoly allowing individuals to grant loans through platforms. Several con - ditions restrained the scope of this exemption: loans could only be granted by non-professional lenders, the amount of each loan was capped at EUR2,000 per lender and per project (EUR5,000 for interest-free loans), and the maturity of each loan had to be less than seven years. Borrow - ers raising funds through crowdlending were not able to raise more than EUR1 million per project. Mortgage loans and consumer credits were also outside the scope of crowdlending. 4. Online Lenders 4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities Regulation (EU) 2020/1503 on European crowd - funding service providers for business has superseded the French regime. Concerning regulatory authorisations, crowd - lending internet platforms must be licensed by
the AMF as crowdfunding service providers with the assent of the ACPR if the applicant’s pro - gramme of operations includes facilitating the granting of loans. Legacy lenders, on the other hand, must be authorised as credit institutions by the ACPR. The regulatory requirements that crowdlending platforms have to respect are pro - portionate to their status (ie, not as burdensome as the rules applicable to legacy credit institu - tions). As an exception, the French regulatory regime for crowdfunding intermediaries remains in place for crowdfunding and crowdlending platforms where their activity is restricted to free loans and donations. 4.2 Underwriting Processes Among other regulatory conditions aimed at pro - tecting lenders, crowdlending platforms must deliver detailed information to potential lenders, mainly relating to the underlying projects and the attached risks. Notably, to facilitate the compre - hension of the investors, the crowdfunding plat - forms must make a key investment information sheet containing mandatory information avail - able to prospective investors. The underwriting process itself is not directly regulated for crowdlending platforms. 4.3 Sources of Funds for Fiat Currency Loans Funds raised through crowdlending platforms initially came from individual lenders acting on their own account, outside of any profession - al context. However, investment funds have increasingly started to invest alongside individu - als in SMEs in financing deals through crowd - lending platforms.
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