FRANCE Trends and Developments Contributed by: Hugues Bouchetemble and Sophie Perus, Kramer Levin Naftalis & Frankel
Kramer Levin Naftalis & Frankel 47, avenue Hoche 75008 Paris France
Tel: +33 144 094 604 Fax: +33 144 094 601
Email: sperus@kramerlevin.com Web: www.kramerlevin.com/en
Introduction In recent years, and particularly in the past year, one of the main objectives of both French regu - lations and court judgments has been to regu - late the conduct of unlisted transactions by retail clients. In France, investment is massively distributed via collective investment products such as Under - takings for Collective Investment in Transferable Securities (UCITS), as well as certain alternative investment funds (AIFs). The French regulatory landscape is governed by a dual dynamic, both parts of which, in reality, pursue the same goal, namely: • on the one hand, to regulate certain trans - actions involving unlisted products within a protection framework precisely defined by the French legislature; and • on the other, to restrict access to unlisted products, particularly private equity products, which deviate from the new regulatory frame - work provided by French law. Measures to Improve Retail Clients’ Access to Unlisted Transactions The French regulatory system has been stead - ily strengthening the scope for private clients to access private equity products, with reform after
reform, the most emblematic being that result - ing from the so-called 23 October 2023 Green Industry Law (No 2023-973). For now, this access is mainly limited to life insurance products and certain retirement sav - ings products. The new regulations significantly extend the list of unlisted assets that can be pur - chased by retail customers via these vehicles. This applies in particular to certain private equity funds, securitisation products and European Long-Term Investment Funds (ELTIFs). This is also reflected in the requirement for insurers to offer profiled financial management including a minimum proportion of non-listed products. In order to strengthen investor protection, the previously unregulated business of managing financial portfolios invested in insurance prod - ucts under mandate is now regulated by law. Only insurance companies and insurance bro - kers may engage in this activity. This activity may be sub-delegated to an approved portfolio man - agement company, but since a recent position paper from the Autorité de Contrôle Prudentiel et de Résolution (ACPR), it is required that this management company itself be registered in France as an insurance intermediary.
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