Acquisition of unlisted shares in a PEA: the date on which ownership is transferred is important

Facts

On 29 May 2024, the shareholders of company Y decided to carry out a capital increase.

Wishing to take part in this operation, Mr A indicated that on 12 June 2024 he had opened a PEA-PME with Bank X in order to hold the shares resulting from this increase. Mr A stated that on the same date he had transferred the funds needed to acquire the unlisted shares to his plan, and that these funds had been immediately transferred to the issuing company.

However, on 30 July 2024, Bank X informed Mr A that the transaction would have to be cancelled in his PEA-PME on the grounds that the shares had been acquired prior to the opening of the PEA-PME. As a result, the unlisted shares acquired during the aforementioned capital increase were removed from the plan.

Mr A contested this decision, arguing that the transfer of ownership of the shares had taken place after the plan had been opened, more specifically on 21 June 2024. This was the date on which a report by the Chair of the issuing company recorded the lifting of all the conditions precedent relating to the capital increase, decided on 29 May 2024, as well the date of the entry of the shares in the company's share transfer register.

Faced with Bank X's persistent refusal to satisfy his request, Mr A asked me to intervene.

Investigation

I contacted institution X, which first confirmed that Mr A had opened his plan on 12 June 2024. On the same day, the cash account was credited with the amount needed to acquire the unlisted shares resulting from the capital increase. This amount was immediately transferred from the same account to the issuing company. 

However, the bank told me that, following this transaction, it had received a share ownership certificate showing a purchase date of 30 May 2024, i.e. prior to the opening of the plan. It was this inconsistency that led the professional to cancel the disputed transaction.

On receiving this reply, I examined the case carefully and recontacted the professional.

I pointed out that Mr A had sent me additional information during the investigation of his case, in particular company Y’s share transfer register.

I also drew its attention to the effective date of the transfer of ownership of unlisted shares, by forwarding it the published ruling of the Commercial Chamber of the Cour de Cassation, which clearly states that: "The transferee acquires the status of shareholder on the effective date of the entry, by the issuing company, of the transferred shares in the purchaser's individual account or in the registers of registered shares that it keeps (...)" (Cass. com., 18 Sept. 2024, No. 23-10.455, published in the Bulletin[1]).

It follows from this decision that the date of transfer of ownership is that of entry in the issuing company's share transfer register or in the purchaser's individual account, and not that of the decision to increase the capital, as the initial certificate erroneously suggested.

Consultation of the transfer register confirmed that the entry, and therefore the transfer of ownership, had taken place on 21 June 2024, which was also corroborated by the extract from the decisions and certificates of the company's Chair filed in July 2024 with the registry of the Tribunal de Commerce.

Recommendation

I reminded institution X of the applicable eligibility rules, as t out in the Bulletin Officiel des Impôts [Official Tax Bulletin]^[2], which specify that: "the sums paid into the plan must be used exclusively for the purchase or subscription of the securities referred to in I-C § 100" and that "the transfer of ownership of the securities may, under no circumstances, precede the debiting of the PEA cash account".

Given that the PEA-PME was effectively opened on 12 June 2024, that the transfer was made that same day from the cash account dedicated to the subscription of the securities, and that the transfer of ownership of the securities was recorded on 21 June 2024, it appeared that all the eligibility conditions had been met. 

I therefore felt that a review of the professional's decision was justified.

In response to my analysis, the professional confirmed its agreement and agreed to regularise the situation by fulfilling Mr A’s request to register the unlisted shares in his PEA-PME.

Chronology:

Lesson to be learned

For unlisted shares: as this dossier illustrates, when unlisted shares are acquired, transfer of ownership takes place when the shares are registered in the purchaser's individual account or in the issuing company's registered share registers.

However, this rule does not apply to membership shares (parts sociales)^[3], for which the transfer of ownership is governed by ordinary sales law, or to listed shares, i.e. shares admitted to trading by a central securities depository or delivered over a settlement and delivery system, which, under Article 570-3 of the AMF General Regulation, sets the transfer of ownership at the date on which the trades are unwound, i.e. the date on which the assets (securities and cash) are actually transferred.

For listed shares: I have already had occasion to discuss the notion of settlement-delivery, which, after previously having being set at T+3, was reduced to T+2 from 2015^[4]. The period between the trade date and the settlement date (the time when the buyer receives the securities and the seller receives payment), commonly known as the settlement-delivery period, is no later than the second business day following the trade date for most transactions involving securities, such as shares or bonds and which are executed on a trading platform.

However, discussions are currently underway at European Union level^[5] with a view to shortening this period to T+1 in order to align with the practices of the main stock exchanges in the United States, Europe and Asia. At the time of writing, this change is planned for 11 October 2027. We will no doubt have the opportunity to revisit it at that time.