General regulation of the AMF into force from 30/07/2023 to 31/12/2023

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Where appropriate, an AMF instruction shall specify the nature of the information referred to in Article 1(4) and (5) of Regulation (EU) n° 2017/1129 of 14 June 2017 and to be included in the documents to be drawn up in order not to fall within the scope of the obligation to publish a prospectus.

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Public limited companies (sociétés anonymes) with their registered office in France and whose securities are admitted to trading on a regulated market shall publicly disclose, in accordance with the procedures set out in Article 221-3 the information and reports mentioned in Articles L. 225-37, L. 22-10-9, L. 22-10-10, L. 22-10-11, L. 225-68, L. 22-10-20 and L. 22-10-71 of the Commercial Code no later than on the day they file the report referred to in Article L. 225-100 of the Commercial Code with the clerk of the commercial court.

Companies organised as partnerships limited by shares (sociétés en commandites par actions) whose securities are admitted to trading on a regulated market shall publicly disclose the information mentioned in Articles L. 226-10-1 and L. 22-10-78 of the Commercial Code in the same conditions.

Other French legal entities shall publicly disclose information about the matters mentioned in the first paragraph under the same conditions as those set out in the first paragraph, if they are required to file their financial statements with the clerk of the commercial court and as soon as the annual financial statements for the previous year have been approved, otherwise.

Whenever an issuer draws up a universal registration document pursuant to Article 9 (12) of Regulation (EU) n° 2017/1129 of 14 June 2017, that document may include the reports and disclosures mentioned in the first paragraph. In such case, the distribution requirements of that paragraph do not apply.

Where the AMF exempts an issuer from the obligations set forth in Article L. 451-1-2, pursuant to Section VIII of Article L. 451-1-2 of the Monetary and Financial Code and Articles 222-11 to 222-16 herein, such issuer shall disseminate, keep and file the information deemed equivalent by the AMF, using the procedures defined in Articles 221-3 to 221-5.

The AMF then informs the European Securities and Markets Authority of the waiver it has granted.

A State that is not party to the European Economic Area (EEA) agreement shall be regarded as setting requirements equivalent to those in Point 3 of I of Article 222-3 where, under the law of that State, the management report is required to include at least the following information:

1. a fair review of the development and performance of the business and of the position of the issuer, together with a description of the principal risks and uncertainties that it faces, so as to present a balanced and comprehensive analysis consistent with the size and complexity of the business;

2. An indication of the important events that have occurred since the end of the financial year;

3. Indications of the issuer's likely future development.

The analysis referred to in Point 1° shall, to the extent necessary for an understanding of the issuer's development, performance or position, include both financial and, where appropriate, non-financial key performance indicators relevant to the issuer's particular business.

A State that is not party to the European Economic Area Agreement shall be regarded as setting requirements equivalent to those in Point 2° of I of Article 222-3 where, under the law of that State, the issuer:

1. Is not required to provide individual accounts for the parent company;

2. Is required to provide consolidated financial statements including:

   1. for issuers of shares, dividends computation and ability to pay dividends;

   2. for all issuers, where applicable, minimum capital and equity requirements and liquidity issues.

3. Must provide the AMF, at its request, with additional audited disclosures giving information on the individual accounts of the issuer as a standalone, relevant to the elements of information referred to under points (a) and (b) of 2°. This information may be drawn up under the accounting standards of the issuer's home country.

A State that is not party to the European Economic Area Agreement shall be regarded as setting requirements equivalent to those in 2° of I of Article 222-3 with regard to individual accounts where, under the law of that State, the issuer is not required to provide consolidated financial statements under international accounting standards deemed to be applicable in the European Union under the terms of Article 3 of Regulation (EC) 1606/2002 and the national accounting standards of the country concerned which are equivalent to such standards.

If such financial information is not in line with those standards, it must be presented in the form of restated financial statements. The individual accounts must be audited independently.

A State that is not party to the European Economic Area Agreement shall be regarded as setting requirements equivalent to those in Article 222-6 where, under the law of that State, the issuer must provide a set of condensed financial statements and an interim management report that includes as a minimum:

1. A review of the period covered;

2. Indications of the issuer's likely future development for the remaining six months of the financial year;

3. For issuers of shares and if already not disclosed on an ongoing basis, major related parties' transactions.

A State that is not party to the European Economic Area agreement shall be regarded as setting requirements equivalent to those in Point 4° of I of Article 222-3 and in Point 3° of Article 222-4 where, under the law of that State, one or more persons within the issuer take responsibility for the annual and half-yearly financial information, and in particular for the following:

1. 1° The compliance of the financial statements with the applicable reporting framework or set of accounting standards ;

2. 2° The fairness of the management review included in the management report.

For the purposes of this section, “issuer” means (i) any issuer who has requested or approved admission of its financial securities to trading on a regulated market operating within French territory, (ii) any issuer who has requested or approved trading of its financial securities on a multilateral trading facility operating within French territory in the case of a financial security traded exclusively on a multilateral trading facility, and (iii) any issuer who has requested trading of its financial securities on an organised trading facility operating within French territory in the case of a financial security traded exclusively on an organised trading facility.

Information provided to the public must be accurate, precise and fairly presented.

When an issuer or a participant in the market for emissions allowances defers publication of privileged information under the conditions set out in Article 17 of the market abuse regulation (Regulation (EU) No. 596/2014), the Autorité des marchés financiers may require explanations for this deferred publication. These explanations must be provided without further delay.

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Any material change to the inside information already made public, and which falls within the scope of the provisions of Article 17 of Regulation (EU) n° 596/2014 of the European Parliament and the Council of 16 April 2014 on Market Abuse, is subject to the publication obligation provided by this article.

Any person that is preparing a financial transaction liable to have a significant impact in the market price of a financial instrument, or on the financial position and rights of holders of that financial instrument, must disclose the characteristics of the transaction to the public as soon as possible.

If confidentiality is temporarily necessary to carry out the transaction and if the person mentioned in the preceding sentence is able to ensure such confidentiality, he may assume responsibility for deferring disclosure of those characteristics.

Where a person has publicly disclosed his intentions and subsequently his intentions no longer conform to his initial declaration, he is required to inform the public promptly of his new intentions.

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All the information referred to in Articles 223-2 to 223-7 must be disclosed to the public in the form of a news release distributed in accordance with Article 221-3.

The AMF may request that the issuers and persons mentioned in Articles 223-2 to 223-7 publish, within an appropriate period of time, information that the AMF deems necessary for investor protection and orderly markets. Failing such publication, the AMF itself may disclose the information.

All issuers must ensure that the public enjoys equal and simultaneous access to the information sources and channels that the issuer or its advisors make available specifically to investment analysts, particularly with regard to financial transactions.

By way of derogation from the provisions of the first paragraph, where the transaction involves equity securities submitted for the first time to trading on a regulated market or organised multilateral trading facility, the financial analysts appointed by member institutions of the syndicate in charge of performing the transaction, or by the group to which these institutions belong, may receive information prior to its public dissemination, subject to compliance with the provisions of Article 315-1 and in the conditions specified in an AMF instruction.

The AMF shall publicly disclose the information mentioned in Article L. 233-11 of the Commercial Code. The AMF shall specify in an instruction how such information is to be transmitted to it.

The provisions of this section apply to French issuers referred to in paragraph I of Article L. 621-18-2 of the Monetary and Financial Code.

They also apply to companies whose financial securities are admitted to trading on an organised multilateral trading facility within the meaning of Article 524-1.

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In accordance with the last paragraph of Article L. 621-18-2 of the Monetary and Financial Code, notifications are not required for transactions carried out by a person referred to in the aforementioned article if the total amount of such transactions does not exceed EUR 20,000 in a calendar year.

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The report referred to in Article L. 225-100 of the Commercial Code contains a summary statement of the transactions referred to in Article L. 621-18-2 of the Monetary and Financial Code, which have been made during the past financial year and have been reported.

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Without prejudice to the provisions of Article 223-6, in particular when the market for the financial instruments of an issuer is subject to large price swings or unusual trading volumes, the AMF may require persons to publicly disclose their intentions within a set deadline, where there is reason to believe they are preparing a takeover bid, either alone or in concert with others within the meaning of Article L. 233-10 of the Commercial Code. This shall be the case, for example, in the event of discussions between the issuers concerned or the appointment of advisors with a view to preparing a public offer.

The information is publicly disclosed in a news release submitted in advance to the AMF for approval and in accordance with Article 221-3.

Where the persons mentioned in Article 223-32 state their intention to file a draft offer, the AMF sets the date on which they must publish a release describing the terms of the draft offer, or, depending on the circumstances, file a draft offer.

The news release referred to in the first paragraph should mention the financial terms of the draft offer, any agreements that could affect its execution, the equity interest held in the issuer in question, any conditions that must be satisfied before the draft offer is filed, and the proposed timetable.

The AMF may request any information it deems necessary.

If the terms of the draft offer are not disclosed or if the draft offer is not filed within the deadline mentioned in the first paragraph, the persons in question are deemed not to have the intention of filing a draft offer and are subject to the provisions of Article 223-35.

When a person makes the characteristics of a draft offer public under the terms of Articles 223-6 or 223-33, including the nature of the offer and the planned price or exchange ratio, that person shall immediately notify the AMF and the AMF shall so notify the market by means of a publication. This publication shall mark the beginning of the pre-offer period, as defined in Article 231-2 (5°).

If the person referred to in the first paragraph abandons the planned offer, it shall immediately notify the AMF.

In the circumstances referred to in the previous paragraph, or if a draft offer is not filed within the deadline mentioned in Article 223-33, the AMF shall notify the market by means of a publication.

If the persons mentioned in Article 223-32 indicate that they do not intend to file a draft offer, or if they are deemed not to have such an intention pursuant to the final paragraph of Article 223-33, they may not file a draft offer for a period of six months starting from when they made their statement or from the expiry of the deadline mentioned in the final paragraph of Article 223-33, unless they provide evidence of major changes in the environment, situation or shareholding structure of the persons concerned, including the issuer itself.

During the period mentioned in the first paragraph, these persons may not place themselves in a situation in which they are obliged to file a draft offer. If they increase, by 2% or more, the number of equity securities and securities giving access to capital or voting rights that they hold in the issuer, they must report this immediately and indicate the objectives that they intend to pursue through to the expiry of the period.

The information mentioned in the previous paragraph shall be publicly disclosed according to the conditions and procedures set forth in Article 222-22.

When an issuer of financial instruments that are traded on a regulated market plans to apply for admission of its financial instruments to trading on an organised multilateral trading facility within the meaning of Article 524-1, it shall so notify the public at least two months before the planned date for the admission of the financial instruments to trading on the relevant multilateral trading facility under the terms of V of Article L. 421-14 of the Monetary and Financial Code. The notice shall specify the reasons therefor and the consequences for shareholders and the public, following procedures that are identical to those stipulated in Article 221-3. The notice shall also include the timetable for the move.

If the issuer concerned by the first paragraph decides to apply for admission of its financial instruments to trading on an organised multilateral trading facility within the meaning of Article 524-1, after the general meeting stipulated in Article L. 421-14 of the Monetary and Financial Code, it shall immediately notify the public, following procedures that are identical to those stipulated in Article 221-3. The notice shall specify the reasons therefor and the consequences for shareholders and the public. It shall also specify the procedures for the move. The notice shall also include the timetable for the move.

Regulation 236/2012 of the European Parliament and Council dated 14 March 2012 concerning short selling and certain aspects of contracts for the exchange of credit risk sets out transparency rules applicable to net short positions.

The information referred to in Article L. 22-10-48 of the Commercial Code is transmitted electronically to the AMF by the persons referred to in that article in the manner specified in an AMF instruction.

The issuer concerned publishes this information on its website as soon as possible and no later than the business day after it has been received.

An offer may consist of:

1. a single offer proposing a purchase of the target securities, an exchange for existing securities or securities to be issued, or a payment in cash and securities;

2. an alternative offer;

3. a principal offer with one or more non-severable subordinate options.

Where the securities provided in exchange are not liquid securities admitted to trading on a regulated market in a Member State of the European Union or a State party to the EEA Agreement, the offer must include a cash option.

If, in the twelve months before the offer is filed, the offeror, acting alone or in concert, has purchased, for cash, securities giving it more than 5% of the shares or voting rights of the target company, the offer must include a cash option.

Where the offer consists of an alternative offer or a single offer proposing payment in cash and securities, the AMF shall assess the validity of the offeror's designation of it as a public cash offer or public exchange offer.

The offeror may give holders the option of selling their securities at a later date, provided that the option is exercisable within a reasonable time, that it is subordinate to the principal offer, and that exercise of the option

is unconditionally guaranteed by the institution sponsoring the offer as defined in Article 231-13. Any arrangements that consist in offering payment at a later date of the difference between the future market price and the future offer price must contain guarantees and advantages equivalent to those of a deferred sale.

I. - 1° Any public offer made following the normal procedure referred to in Chapter II of this Title, at the close of which the offeror, acting alone or in concert within the meaning of Article L. 233-10 of the Commercial Code, does not hold a number of shares representing a fraction of more than 50% of the share capital or voting rights, shall be null and void. This threshold shall be determined following the rules set out in Article 234-1.

2° However, when reaching a majority seems impossible or unlikely for reasons unrelated to the characteristics of the offer, the AMF may, at the request of the offeror, authorise this threshold to be waived or lowered to below 50% of the share capital or voting rights, particularly where:

a) the target company is already controlled, within the meaning of Article L. 233-3 of the Commercial Code, by a person other than the offeror, who is not acting in concert with him within the meaning of Article L. 233-10;

b) commitments not to tender to the offer have been given by one or several shareholders of the target company, in particular if the application of the threshold referred to in 1° obliges the offeror to acquire at least two-thirds of the securities likely to be tendered to the offer;

c) there are one or several competing offers;

d) provisions of law, regulation or bylaw prevent any majority control being acquired. The AMF shall rule on the basis of the principles set forth in Article 231-3.

II. - Without prejudice to the provisions referred to in I, where the offer is not subject to the terms of Chapter IV of this title, the offeror may stipulate in its offer that a number of securities must be tendered, expressed as a percentage of the share capital or voting rights, below which it reserves the right to withdraw its offer.

An offeror making draft offers for two or more different companies may stipulate that if the threshold or thresholds set pursuant to Article 231-9 is/are reached in one of the offers, it will declare the offer to have succeeded only if this threshold is reached in the other offer or offers. While the offers are open, the offeror may withdraw this condition or the threshold condition referred to in Article 231-9 II, notably in the case of competing or improved offers on one of the target companies.

If, under competition rules, notice of the draft offer must be given to the European Commission, the Autorité de la concurrence or the competent authority in this regard in another State party to the EEA Agreement or the United States of America, the offeror may stipulate the condition precedent of obtaining the decision provided for in Article 6-1 a) or b) of EC Regulation 139/2004, the authorisation provided for in Article L. 430-5 of the Commercial Code, or any authorisation of the same nature issued by the foreign State.

An offeror that seeks to assert such provisions shall provide the AMF with a copy of the notices to the authorities concerned or any document attesting to the steps taken to inform those authorities and shall keep the AMF informed of the progress of the procedure.

The offer shall lapse if the proposed transaction becomes subject to the procedure of Article 6-1 (c) of EC Regulation 139/2004, or the procedure of Article L. 430-5 (III), point 3, of the Commercial Code, or becomes subject to a similar procedure before the competent authority of a foreign State. The offeror shall disclose whether it is seeking to pursue the intended transaction with the authorities to which the case has been referred.

The provisions of the previous paragraphs also apply to a draft offer of which, under competition rules, notice must be given to a foreign competent authority other than those previously mentioned, if the procedure followed for the purposes of obtaining said authorisation is subject to a time frame compatible with a period of ten weeks beginning from the opening of the offer, unless the AMF agrees to extend the offer timetable. The AMF then rules in light of the principles defined in Article 231-3, after having obtained the opinion of the competent body of the target company.

Where the proposed offer calls for remittal of securities to be issued, the irrevocability of the offeror's commitments entails an obligation to propose a resolution to the general meeting of the issuing company's shareholders authorising issuance of the securities under the conditions and clauses of the proposed offer, as consideration to persons tendering their securities to the offer, unless the company's governing body has already obtain an express delegation of authority to this effect.

Depending on the applicable provisions of law, regulation or bylaw governing the offeror, the AMF may authorise the offeror to make opening of the offer conditional on its being authorised by a general meeting of shareholders, provided that such a meeting has already been called before the draft offer is filed.

I. - The draft offer shall be filed by one or more investment services providers authorised to act as underwriter(s) and acting on behalf of the offeror(s).

The filing is made by means of a letter addressed to the AMF guaranteeing the tenor and irrevocable nature of the commitments made by the offeror. This letter must be signed by at least one of the sponsoring institutions.

II. - This letter shall stipulate:

1° The aims and intentions of the offeror;

2° The number and type of securities of the target company that the offeror already holds, alone orin concert, or may hold on its own initiative, as well as the date and terms on which such holdings were acquired in the last twelve months or may be acquired in the future;

3° The price or exchange ratio at which the offeror proposes to acquire the target securities, the basis on which such price or ratio was determined, and the proposed conditions of payment or exchange;

4° If applicable, the conditions provided pursuant to Articles 231-9 II to 231-12.

4°a If the withdrawal threshold referred to in point 1° of Article 231-9 I is applicable to the offer, the number of shares and voting rights represented by this threshold on the date when the offer was filed and, where appropriate, the reasons for which the offeror has applied to the AMF for application of point 2° of Article 231-9 I.

5° The specific procedures by which the financial instruments of the target company will be acquired and, where applicable, the identity of the investment services provider appointed to acquire them on behalf of the offeror.

6° In the cases provided for in Article L. 2312-47 of the Labour Code, whether the procedure to inform and consult the works council of the target company referred to in Article L. 2312-46 of the Labour Code had begun on the announcement of the offer.

III. - The letter shall be accompanied by:

1° The draft offer document drawn up by the offeror, alone or jointly with the target company. In the cases provided for in Article 261-1, the offeror's draft offer document may not be drawn up jointly with the target company;

2° Copies of any prior notices given to other bodies empowered to authorise the proposed transaction.

IV. - In the case provided for in paragraph III of Article L. 433-3 of the Monetary and Financial Code, the letter shall also be accompanied by:

1° The offer document that has been filed or a draft of the offer document that will be filed;

2° Any other document constituting a binding commitment proving that an irrevocable and fair draft offer has been or will be filed for all the equity securities and securities giving access to the capital or voting rights of the company of which more than 30% of the shares or voting rights is held, where such holding constitutes an essential part of the target company's assets.

V. - In all cases, an electronic version of the draft offer document must be transmitted to the AMF for posting on its website.

The AMF shall make public the main provisions of the draft offer. Such publication shall signal the beginning of the offer period.

Once the draft offer has been filed, the Chairman of the AMF may ask the market undertaking that runs the regulated market on which the target company's securities are admitted to trading to halt trading in those securities under the terms of Article L. 421-15 of the Monetary and Financial Code. Under the terms of Articles L. 424-5 and L. 425-3 of the Monetary and Financial Code, the AMF Chairman may also ask the person running a multilateral trading facility to suspend trading in the securities of the target company or a systematic internaliser to suspend its activity with regard to those securities.

Such request may also extend to other securities concerned by the draft offer.

The request shall made to all market undertakings, multilateral trading facility operators and systematic internalisers trading in the target securities, as necessary.

I. - Once the offer period begins, the draft offer document shall be made available to the public free of charge at the offices of the offeror and the sponsoring institution(s). Where the offer document has been prepared jointly with the target company, it shall also be made available at the offices of the target company and the organisations engaged as paying agent for the target company's securities.

Where the registered office of the offeror or sponsoring institution is outside France, the offer document must be made available at the offices of an investment services provider in France designated for this purpose by the offeror or sponsoring institution.

The draft offer document shall also be published on the website of the offeror and, if it was prepared jointly with the target company, on the website of the target company, provided that these companies have websites.

II. - In all cases, a copy of the draft offer document must be sent free of charge to any person who requests it.

III. - On or before the date that the draft offer is filed with the AMF, a news release shall be issued. The offeror shall ensure that the release is distributed in accordance with Article 221-3. This news release shall present the main elements of the draft offer document and explain how the document is being made available.

IV. - The draft offer document and the news release mentioned in Part III shall include the words: "This offer and the draft offer document are subject to AMF approval".

The target company may, once the news release mentioned in Part III of Article 231-16 has been published, issue its own news release in accordance with Article 221-3 to inform the public of the opinion of its Board of Directors or Supervisory Board or, in the case of a foreign company, the competent governing body, on the benefits of the offer or the consequences of the offer for the target company, its shareholders and its employees.

Where applicable, the news release shall mention the findings of the report by the independent appraiser appointed pursuant to Article 261-1 and the findings of the company economic and social committee opinion referred to in Article L. 2312-46 of the Labour Code. If the news release is published before the appraiser submits his report or the works council of the target company submits the opinion referred to in Article L. 2312-46 of the Labour Code, the target company shall issue another release when the report or the opinion is published, mentioning the appraiser's findings, the reasoned opinion of the governing bodies referred to in the first paragraph and the findings of the works council opinion.

In all cases, if the independent appraiser has not completed his assignment or has not been appointed by the time the offeror files its draft offer document, the target company shall issue a news release to inform the public of the identity of the independent appraiser as soon as the offeror publishes its draft document or as soon as the appraiser is appointed.

The AMF may request any disclosure that it deems necessary.

The draft offer document prepared by the initiator, which must meet the content requirements specified in an AMF instruction, shall mention:

1. The identity of the offeror;

2. The terms of the offer, including in particular:

   a) The proposed price or exchange ratio, based on generally accepted objective valuation criteria, the characteristics of the target company and the market for its securities;

   b) The number and type of securities that it promises to acquire;

   c) The number and type of securities of the target company that the offeror already holds directly, indirectly or in concert, or may hold on its own initiative, as well as the date and terms on which such holdings were acquired in the last twelve months or may be acquired in the future;

   d) Where applicable, the conditions to which the offer is subject pursuant to Articles 231-9 II to 231-12;

   e) The planned timetable for the offer;

   f) Where applicable, the number and type of securities tendered in exchange by the offeror;

   g) The terms of financing for the transaction and the impact of those terms on the assets, activities and financial results of the companies concerned;

   h) If the withdrawal threshold referred to in 1° of Article 231-9 I is applicable to the offer, the number of shares and voting rights represented by this threshold on the date when the offer was filed and, where appropriate, the reasons for which the offeror has applied to the AMF for application of 2° of Article 231-9 I.

3. Its intentions for at least the coming twelve months with regard to the industrial and financial strategy of the companies concerned, where applicable, its specific commitments and intentions formalised within the framework of the procedure to inform and consult the economic and social committee of the target company, referred to in Article L. 2312-46 of the Labour Code, and continued public trading on a regulated market of the equity securities or securities giving access to the capital of the target company;

4. Its policy with respect to employment. In particular, the offeror shall indicate, based on the data available to it and its intentions in the matter of industrial and financial strategy as mentioned in Point 3° above, any foreseeable changes in the size and composition of the workforce;

5. The law applicable to contracts between the offeror and holders of the target company's securities following the offer, and competent jurisdictions;

6. Agreements relating to the offer to which the offeror is party or of which it is aware, as well as the identity and characteristics of persons with which it is acting in concert or persons acting in concert with the target company within the meaning of Articles L. 233-10 and L. 233-10-1 of the Commercial Code and of which the offeror is aware ;

7. If relevant, the opinion and the reasons therefor of the Board of Directors or Supervisory Board, or, in the case of a foreign offeror, the competent governing body, regarding the benefits of the offer or the consequences of the offer for the offeror, its shareholders and its employees; and the voting procedures by which this opinion was obtained, with the possibility for dissenting members to request that their identity and position be mentioned;

8. In the case provided for in Part III of Article L. 433-3 of the Monetary and Financial Code, a commitment to file an irrevocable and fair draft offer for all the equity securities and securities giving access to the capital or voting rights of the company of which more than 30% of the shares or voting rights is held, where such holding constitutes an essential part of the target company's assets;

9. If relevant, the report by the independent appraiser mentioned in Article 261-3;

10. Procedures for making available the information mentioned in Article 231-28.

11. The specific procedures by which the financial instruments of the target company will be acquired and, where applicable, the identity of the investment services provider appointed to acquire them on behalf of the offeror.

The offer document shall bear the signature of the initiator, or of its legal representative, declaring that the information contained therein is accurate.

The offer document shall also include a declaration by the legal representatives of the sponsoring institutions as to the accuracy of the information about the presentation of the offer and the information used to appraise the proposed price or exchange ratio.

The reply document of the target company, which must meet the content requirements specified in an AMF instruction, shall mention:

1° The agreements mentioned in Article 231-5;

2° The information mentioned in Article L. 22-10-11 of the Commercial Code, updated where applicable as at the date of the offer, to the best of the company's knowledge;

3° The independent appraiser's report in the cases provided for in Article 261-1. In order to protect its legitimate interests, the target company may assume responsibility for not disclosing certain information in the independent appraiser's report, provided that there is no risk that this non-disclosure might mislead the public;

3°bis In the cases provided for in Articles L. 2312-42 to L. 2312-51 of the Labour Code, the opinion of the economic and social committee of the target company and, where applicable, the chartered accountant's report prepared on behalf of the works council pursuant to the provisions of Article L. 2312-45 of the Labour Code;

4° The reasoned opinion of the Board of Directors or Supervisory Board or, in the case of a foreign company, the competent governing body, specifies:

• the diligence it has conducted for the purposes of preparing this opinion, in the conditions set out by an AMF instruction;

• the benefits of the offer or the consequences of the offer for the target company, its shareholders and its employees, and, where applicable, the measures it has implemented or decided to implement that are likely to cause the offer to fail. In the case of any new measures likely to cause the offer to fail, the company shall publish a news release to inform the market to this effect;

• the voting procedures by which this opinion was obtained are set out, with the possibility for all members to request that their identity and position be stated.

If the competent corporate body should adopt a reasoned opinion that is different from the project proposed by the ad hoc committee referred to in paragraph III of Article 261-1, it shall state its reasons in this opinion.

5° If they are available and different from the opinion mentioned in point 4°, comments by the economic and social committee or, failing that, of staff members;

6° Whether members of the corporate bodies mentioned in point 4° intend to tender their securities to the offer, specifying in particular, if the offer has several legs, the leg to which they intend to tender their securities, where such is the case;

7° The procedures for making available the information mentioned in Article 231-28.

The reply document shall bear the signature of the legal representative of the target company, declaring that the information contained therein is accurate.

I. - The AMF shall have ten trading days from the beginning of the offer period to determine whether the draft offer complies with applicable laws and regulations.

II. - In the cases provided for in Article 261-1 and for offers under the terms of Articles L. 2312-42 to L. 2312-51 of the Labour Code, the statement of compliance shall be issued no earlier than five trading days after the target company has filed its draft reply document.

III. - In all cases, the AMF may request any supporting documentation or guarantees that it deems appropriate, as well as any further information that it needs for its assessment of the draft offer, the draft offer document or the reply document. In this case, the time period is suspended. It resumes once the information requested has been received.

To determine whether the draft offer complies with applicable laws and regulations, the AMF shall examine:

1° The aims and intentions of the offeror.

2° Where applicable, the type and characteristics of and market for any securities proposed in exchange;

3° Any conditions of the offer pursuant to Articles 231-9 and 231-10;

3° bis If the withdrawal threshold referred to in 1° of Article 231-9 I is applicable to the offer, the number of shares and voting rights represented by this threshold on the date when the offer was filed and, where appropriate, the reasons for which the offeror has applied to the AMF for application of 2° of Article 231-9 I;

4° The information in the draft offer document;

5° In the cases provided for in Article 261-1, the financial terms of the offer, notably with respect to the independent appraiser's report and the reasoned opinion of the Board of Directors, the Supervisory Board, or, in the case of a foreign offeror, the competent governing body.

The AMF may ask the offeror to modify the draft offer if the AMF believes that it may contravene the legal and regulatory provisions mentioned in the first paragraph, and notably the principles referred to in Article 231-3.

In the cases and in accordance with the conditions set forth in Section 2 of Chapter II and in Chapters III to VII of this title, the AMF shall assess application of the special provisions governing the proposed price or exchange ratio.

Where the draft offer meets the requirements of Articles 231-21 and 231-22, the AMF shall publish on its website a reasoned statement of compliance that also constitutes an approval of the offer document.

Where the document does not meet the requirements, the AMF shall refuse to issue a statement of compliance for the draft offer and shall publish its decision on its website.

Where appropriate, the AMF shall set a date for resumption of trading in the securities concerned if trading is still suspended and shall so notify the persons referred to in Article 231-15.

In the cases mentioned in Part III of Article L. 433-1 of the Monetary and Financial Code, where the offer concerns equity securities that are also admitted to trading on a market not located in a Member State of the European Union or a State party to the EEA Agreement, whether regulated or not, where the AMF does not claim jurisdiction, and where an offer document has been prepared in compliance with a procedure governed by a competent foreign authority, the AMF may exempt the offeror and the target company from the obligation to prepare an offer document and a reply document, provided that the offeror and the target company publish, jointly or separately, a news release subject to review by the AMF. The release, which must be distributed in accordance with Article 221-3 by the author, shall present the main elements of the offer document. In such cases, only Articles 231-36, 231-46, 231-48, 231-49, 231-51 and 231-52 shall be applicable. The information called for in Articles 231-5, 231-18 and 231-19, if not included in the offer document, must be included in the news release.

Once the offer document has been approved by the competent authority of another Member State of the European Union or a State party to the EEA Agreement, the offeror and the target company are exempt from preparing an offer document and a reply document, provided that their application is accompanied by a copy of the offer document approved by the competent authority and translated in French.

This document should be published in accordance with the procedures provided for in Article 231-27.

I. - 1° The target company shall file a draft reply document with the AMF no later than on the fifth trading day following publication by the AMF of its statement of compliance.

2° Exceptionally, if an independent appraiser has been appointed pursuant to Article 261-1, the target company shall file its draft reply document no later than on the twentieth trading day after the beginning of the offer period.

3° Where the offer is filed by a shareholder who already holds, either directly or indirectly, alone or in concert within the meaning of Article L. 233-10 of the Commercial Code, at least half of the capital and voting rights of the target company, the latter cannot file its draft reply document before expiry of a period of fifteen trading days following the filing of the draft offer document by the offeror.

4° For offers in which the economic and social committee must be informed and consulted pursuant to the provisions of Articles L. 2312-42 to L. 2312-51 of the Labour Code, the target company shall file a draft reply document by the date of the later of the following two events:

a) Where an independent appraiser has been appointed pursuant to Article 261-1, no later than twenty trading days after the beginning of the offer period;

b) In other cases, no later than fifteen trading days after the beginning of the offer period;

In any event, the draft reply document may not be filed before the opinion of the works council of the target company or the date on which the works council is deemed to have been consulted as provided by Article L. 2312-46 of the Labour Code.

II. - The electronic version of the draft reply document shall be sent to the AMF for posting on its website. As soon as it has been filed, the draft reply document shall be made available to the public in accordance with the procedures set out in Paragraphs I and II of Article 231-16 and shall contain the wording referred to in Paragraph IV of the said article. No later than when it is filed with the AMF, it shall be the subject of a news release distributed by the target company in accordance with Article 221-3.

This news release presents the main elements of the draft reply document, explains how the document is being made available, and contains the wording referred to in Paragraph IV of Article 231-16.

III. - Except in the cases provided for in Paragraph II of Article 231-20, the AMF shall have five trading days from the filing of the draft reply document to issue its approval in accordance with Article 231-20. During this time, the AMF may request any additional information that it deems necessary for its review. In this case, the time period is suspended. It resumes once the information requested has been received.

1. Public distribution of the AMF-approved offer document drawn up by the offeror, alone or jointly with the target company, must occur before the opening date of the offer and no later than the second trading day following issuance of the statement of compliance.

2. The offer document approved by the AMF must be distributed in one of the following forms:

   1. Publication of the document in at least one daily newspaper with nationwide circulation that covers economic and financial news;

   2. Publication of a summary of the offer document on the same conditions as in a), when the offer document is made available free of charge at the offices of the offeror and the sponsoring institution(s); or publication of a news release, distributed in accordance with Article 221-3 under the offeror's responsibility, specifying that the offer document is available as described above.

      Where the registered office of the offeror or sponsoring institution is outside France, the offer document must be made available at the offices of an investment services provider in France designated for this purpose by the offeror or sponsoring institution. Where the offer document has been prepared jointly with the target company, the document shall also be made available free of charge at the offices of the target company and the organisations engaged as paying agent for the target company's securities.

      In all cases, a copy of the document must be sent free of charge to any person who requests it, and an electronic version of the offer document must be sent to the AMF for posting on its website

3. The target company sends its reply document to the offeror as soon as the AMF has issued its approval. The reply document must be distributed in one of the following forms:

   1. Publication of the document in at least one daily newspaper with nationwide circulation that covers economic and financial news;

   2. Publication of a summary of the reply document on the same conditions as in a), when the reply document is made available free of charge at the offices of the target company or the organisations engaged as paying agent for its securities; or publication of a news release, distributed in accordance with Article 221-3 under the offeror's responsibility, specifying that the document is available as described above.

      In all cases, a copy of the reply document must be sent free of charge to any person who requests it, and an electronic version must be sent to the AMF for posting on its website.

4. The approved offer and reply documents published and made available to the public shall always be identical to the original versions approved by the AMF.

I.- Disclosures about the legal, financial, accounting and other characteristics of the offeror and the target company, which must meet the content requirements specified in an AMF instruction, shall be filed with the AMF and made available to the public no later than the day before the offer opens, in accordance with the procedures referred to in points 2° and 3° of Article 231-27.

The reports by the statutory auditors of the offeror and the target company must also be filed with the AMF under the same conditions.

II. - Foreign offerors shall appoint, with the assent of the AMF, a statutory auditor to verify the translation of the financial statements and notes, as well as the relevance of any supplements and adaptations thereto. The statutory auditor shall send a letter to the offeror when it completes its work on the translation of these elements and shall state its observations, if any. The offeror shall forward a copy of the completion letter to the AMF. These provisions shall also apply to foreign target companies.

III. - For the application of waiver provided for in Article 1, paragraphs (4) f) and (5)e of Regulation (EU) n° 2017/1129, the statutory auditors shall declare that any pro forma has been properly prepared in accordance with the indicated basis and that the accounting basis complies with the offeror's accounting policies.

The offeror's statutory auditors shall examine all the information from the offeror referred to in Paragraph I and any updates or corrections thereto. This overall examination and any special verifications shall be carried out in accordance with a standard that is applicable to statutory auditors.

They shall draw up a completion letter for their work, in which they inform the offeror about any reports issued. Upon completion of their overall examination and any special verifications that may have been made in accordance with the aforementioned professional standard, they shall state their observations, if any.

The offeror shall forward a copy of the completion letter to the AMF.

IV. - No later than the day before the offer opens, the offeror, the target company and at least one of the sponsoring institutions shall file a declaration certifying that all the information required under this article has been filed and has or will be disseminated within the timeframe stipulated in paragraph I.

If the AMF finds an omission or a material inaccuracy in the content of the information mentioned in Article 231-28, it shall inform the offeror or the target company, as appropriate, of this fact. The offeror or target company is then required to amend the information and file the corrections with the AMF.

Any omission or inaccuracy, with regard to this General Regulation or to AMF instructions, that could manifestly distort an investor's assessment of the proposed transaction shall be considered as material.

These corrections shall be made available to the public as soon as possible, in accordance with Points 2° and 3° of Article 231-27.

The AMF may postpone the closing date of the offer to give holders of securities at least five trading days to respond following publication of the information mentioned in Article 231-29.

The offer timetable is set based on the distribution date of the joint offer document of the offeror and the target company or the reply document of the target company.

The offer opens on the trading day after the latest of the following events:

1. Distribution of the approved offer document prepared by the offeror (where applicable, jointly with the target company) or, in the cases provided for by Article 261-1, distribution of the reply document prepared by the target company;

2. Distribution of the information mentioned in Article 231-28;

3. Where applicable, receipt by the AMF of any prior authorisations required by law.

The AMF publishes the opening and closing dates of the offer and the release date of the outcome of the offer.

Persons wishing to tender their securities to the offer must send their orders to an authorised provider during the offer period.

At any time during the offer period, the AMF may postpone the closing date of the offer.

The AMF publishes the results of the tender offer, which are transmitted to it by the market operator concerned or by the sponsoring institution, as the case may be.

The parties concerned by the offer, their officers and directors and their advisers shall demonstrate particular vigilance in their statements.

Any advertisement, regardless of its form and method of dissemination, shall be communicated to the AMF before being disseminated.

Such advertisements shall:

1. State that an offer document or reply document has been or will be published and indicate where investors are or will be able to obtain it;

2. Be clearly recognisable as advertisements;

3. Contain no information that could mislead the public or discredit the offeror or the target company;

4. Be consistent with the information contained in the news releases, the offer document and the reply document;

5. Where applicable and at the request of the AMF, contain a warning about certain exceptional characteristics of the offeror, the target company, or the financial instruments concerned by the offer.

The provisions of this article shall also apply during the pre-offer period.

Any additional information not included in the offer document approved by the AMF must be made public in a news release. The author of the release shall ensure that it is distributed in accordance with Article 221-3.

The provisions of this section shall apply from the beginning of the pre-offer period until the end of the offer period.

The provisions of Sub-section 1 apply to any person or entity, including the persons concerned by the offer. Investment services providers are subject to the provisions of Sub-section 2.

The fractions of 1%, 2% and 5% referred to in this section are determined in accordance with the assimilation methods provided for by Article L. 233-9 of the Commercial Code, except those provided for in Point 3° of Section II of this article.

The effects of statutory restrictions on the number of votes held by individual shareholders at general meetings, mentioned in Articles L. 225-125 and L. 22-10-47 of the Commercial Code, shall be suspended during the first general meeting following the close of the offer where the offeror, acting alone or in concert, has acquired more than two-thirds of the shares or voting rights of the target company.

Where provided for by the articles of association, the effects of statutory restrictions on the exercise of voting rights attached to the equities of the company, and the effects of clauses in agreements concluded after 21 April 2004 providing for restrictions on the exercise of voting rights attached to the equities of the company, shall be suspended during the first general meeting following the close of the offer where the offeror, acting alone or in concert, has acquired more than one-half of the shares or voting rights of the target company.

Where provided for by the articles of association, the extraordinary powers held by certain shareholders to appoint and dismiss directors, members of the Supervisory Board, members of the Management Board, Chief Executive Officers and Deputy Chief Executive Officers shall be suspended during the first general meeting following the close of the offer where the offeror, acting alone or in concert, has acquired more than one-half of the shares or voting rights of the target company.

Where the offeror, acting alone or in concert, holds less than one-half of the shares or voting rights of the target company, only the standard offer procedure shall apply.

The term of the offer is twenty-five trading days. If the draft reply document is filed after the compliance ruling is published, the period starting on the day after the dissemination of reply document and ending with the closing of the offer shall be twenty-five trading days, without exceeding thirty-five trading days from the opening of the offer.

Exceptionally, when the offeror asserts the provisions of Article 231-11, the closing date and timetable of the offer are set after the AMF has received the documents supporting the authorization by the competition authorities mentioned in the first point of Article 231-11.

In agreement with the AMF, the market operator concerned announces the conditions and deadlines for account-keeping institutions to deposit securities tendered to the offer and for delivery and settlement in securities or cash, as well as the date on which the outcome of the offer will be available.

Orders of persons wishing to tender their securities to the offer may be cancelled at any time up to and including the closing date of the offer.

In principle, the outcome of the offer is published no later than nine trading days after the closing date.

If the AMF determines that the offer has succeeded, the market operator announces the terms of settlement and delivery for the securities acquired by the offeror. If the AMF determines that the offer has not succeeded, the market operator announces the date on which the target securities will be returned to the account-keeping institutions.

If the offer is subject to an acceptance threshold or a withdrawal threshold, the AMF publishes a provisional result as soon as the market operator notifies it of the total number of securities tendered for centralisation by authorised intermediaries.

Unless it is unsuccessful, any offer made following the normal procedure shall be re-opened within ten trading days of publication of the final outcome.

The guarantee of the irrevocability of the offeror's commitments referred to in Article 231-13, shall also concern the re-opening of the offer.

The AMF shall publish the timetable for the re-opened offer, which must last ten or more trading days.

However, if the offeror proceeds directly to a squeeze-out in accordance with Articles 237-1 and seq., the initial offer need not be re-opened, on condition that a squeeze-out was mentioned in the offeror's statement of intentions and that it is filed no later than ten trading days after publication of the outcome of the offer.

At any time after the opening of the offer but no later than five trading days before it closes, a competing proposed offer on the securities of the target company or one of the target companies may be filed with the AMF.

An offeror may improve upon the terms of its original offer or the most recent competing offer until no later than five trading days before the offer closes.

To be declared compliant, a competing public cash offer or an improved cash offer must be at least 2% higher than the price stated in the public cash offer or the previous improved cash offer.

In all other cases, the AMF declares compliant any competing draft offer or improved offer which, assessed in the light of Articles 231-21 and 231-22, significantly improves upon the terms offered to holders of the target securities.

However, a competing or improved offer may be declared compliant if, without modifying the terms of its previous offer, the offeror removes or lowers the acceptance threshold below which the offer will not be declared successful.

Where the AMF declares an improved offer to be compliant, it determines whether to postpone the closing date of the offer(s) and to void orders tendering securities to the earlier offer(s).

Except when the terms of its offer are raised automatically, an offeror that raises its preceding offer must prepare an additional document to supplement the offer document submitted for AMF review in accordance with Article 231-20.

This supplemental document specifies how the terms of the new offer are improved relative to those of the preceding offer, indicating the changes of the various items required by Article 231-18.

The opinion and reasons therefor of the Board of Directors or Supervisory Board or, in the case of a foreign company, the competent governing body of the target company, including the information specified in Article 231-19, are communicated to the AMF. This information is made public as specified in Article 231-37.

A competing offer is opened in accordance with the provisions of Article 231-32. Where the AMF determines the timetable for the competing offer, it aligns the closing dates of all competing bids on the furthermost date, without prejudice to the provisions of Article 231-34.

Where a competing offer is opened, all orders to tender securities to the earlier offer shall be null and void.

The offeror may withdraw its offer within five trading days of publication of the timetable for a competing offer or improved competing offer. If it does so, it must inform the AMF of its decision, which is made public.

The offeror may also withdraw an offer if it is frustrated or if the target company adopts measures that modify its substance, either during the offer or in the event that the offer is successful, or if the measures taken by the company make the offer more costly for the offeror. He can only use this option with the prior authorization of the AMF, which shall rule on the basis of the principles set forth in Article 231-3.

When a period of more than ten weeks has elapsed since the public announcement of the opening of an offer, the AMF may, with a view to expediting comparison of competing offers and with due observance of the order of their filing, set deadlines for filing each successive improved offer.

The AMF announces its decision and specifies the implementation procedures. The deadline may not be less than three trading days from the publication of the AMF's decision on each improved offer.

When a period of more than ten weeks has elapsed since the opening of an offer, the AMF may, with a view to hastening the outcome of the outstanding offers, decide to use a cut-off bid procedure.

The AMF sets a date by which each of the offerors must either inform the AMF that its offer is maintained on the same terms or file a final improved offer.

Where applicable, the AMF rules on the compliance of the improved offer(s) and sets the final offer closing date.

In such case, notwithstanding Article 232-6, no improved offer may be filed unless a new competing offer has been filed, declared compliant and opened.

Where an issuer has acquired more than 10% of the securities representing a single bond issue on or off the market in one or more transactions, it shall so notify the market within four trading days by means of a news release to be disseminated in accordance with the procedures stipulated in Article 221-4. Further acquisitions of the same bond issue are subject to the same disclosure requirement for each additional 10% of the securities acquired in one or more transactions. The 10% threshold shall be calculated on the basis of the number of securities issued, including any subsequent issues granting identical rights to the holders. The number of securities used for calculating whether a threshold has been crossed is the number of securities bought less the number of securities sold.

Issuers of debt securities that have bought back securities during the past half-year shall, within ten trading days after the close of the half-yearly or annual accounts, publish the number of securities remaining in circulation and the number of securities they hold in accordance with Article L. 213-1 A of the Monetary and Financial Code, for each of their bond issues. This information is to be posted on their website or disseminated in accordance with section II of Article 221-4.

The orderly acquisition procedure shall be defined as an initiative by the issuer, its agent or a third party to set up a centralised facility that enables the issuer to offer all holders of a single issue the option of selling or exchanging some or all of the debt securities that they hold, while ensuring equal treatment of all holders.

The procedure for orderly acquisition of debt securities shall be announced by means of a news release disseminated in accordance with the procedures stipulated in Article 221-4 and shall comply with the relevant market abuse rules defined by the market abuse directive (regulation no. 596/2014/ EU).

An AMF Instruction shall stipulate the information to be included in the news release referred to in Article 238-4 when the orderly acquisition procedure involves debt securities having been offered to the public in France, except for those mentioned in points 1° or 2° of Article L. 411-2 of the Monetary and Financial Code or Article L. 411-2-1 of said code.

A professional association of independent appraisers may be recognised, at its request, by the AMF.

I.- The professional association shall draw up a code of conduct setting out the basic principles with which its members must comply.

Members of the association may adapt these principles to reflect their size and organisation. II. - The code of conduct shall set out, inter alia:

1. the principles governing the independence of appraisers;

2. the expertise and resources that appraisers must have;

3. the rules of confidentiality to which they are subject;

4. procedures for taking on and carrying out appraisals and quality controls to verify work done by association members.

III. The code of conduct shall detail the disciplinary action applicable in the event of breaches.

IV. - The code of conduct may be consulted at any time at the association's registered office by any person who so requests. The code shall also be published on the association's website provided the association has such a site.

The association must have the staff and technical resources needed to carry out its mission on an ongoing basis.

The technical resources shall include, inter alia, a data storage facility for the retention of documents, in particular reports by independent appraisers belonging to the association, for at least five years.

Recognition of a professional association shall be subject to prior filing of an application with the AMF containing:

1. the articles (statuts) of the association;

2. a curriculum vitae and an extract from the judicial record (casier judiciaire) for each of the association's legal representatives;

3. a three-year projected budget for the association;

4. a draft code of conduct;

5. a description of the human and technical resources that will enable the association to meet its obligations under this chapter.

In deciding whether to recognise an association, the AMF shall review the application mentioned in Article 263-4 to assess whether the association, based on its filing, fulfils the conditions set forth in Articles 263-2 and 263-3. The AMF may ask the association to provide any further information it considers necessary to reach its decision.

The association shall inform the AMF promptly of any changes in key items in the initial application for recognition, notably concerning its senior management, organisation or supervision.

The association shall inform the AMF promptly of disciplinary action taken against any of its members and shall make available to the AMF the minutes of meetings by the management bodies and general meetings of shareholders.

I. - The AMF may revoke its recognition of an association if said association no longer meets the conditions of its initial recognition.

When the AMF is considering revocation, it shall so inform the association and shall tell it the reasons therefor. The association shall have one month from receipt of such notification to submit any observations it may have.

II. - When the AMF decides to revoke its recognition, the association shall be notified of this by registered letter with return receipt. The AMF shall inform the public of the revocation by means of a news release posted on its website.

The decision shall specify the timetable and method for implementing the revocation. The association must inform its members that its authorisation has been revoked.

I. – When the applicant plans to provide an investment service or an activity referred to in Article R. 532-2 of the Monetary and Financial Code, its programme of operations shall be presented in accordance with Article R. 532-1 of said Code.

II.- When an investment services provider plans to modify its authorisation relating to an investment service or activity referred to in Article R. 532-2 of the Monetary and Financial Code in accordance with Article L. 532-3-1 of said Code, the AMF will notify its decision regarding the programme of operations within the time period indicated in II of Article R. 532-6 of this same Code.

III. – As part of the procedure for authorisation of the branches of investment companies of third countries referred to in III of Article 311-1 by the French Prudential Supervision and Resolution Authority (Autorité de contrôle prudentiel et de résolution), set out in Article L. 532-48 of the Monetary and Financial Code, and prior to the granting of this authorisation, the AMF will notify its decision regarding the programme of operations of the applicant in accordance with Article R. 532-4 of said Code.

If the AMF finds that an investment services provider no longer meets the conditions for the approval of its programme of operations, it shall so inform the Prudential Supervision and Resolution Authority.

To ensure compliance with all of the professional obligations referred to in II of Article L. 621-15 of the Monetary and Financial Code, the investment services provider shall implement the compliance policy and the procedures relative to the responsibilities of the management body laid down in Articles 22 and 25 of Commission Delegated Regulation 2017/565 of 25 April 2016.

The compliance officer referred to in Paragraph 3 of Article 22 of Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 shall hold a professional license issued under the conditions defined in Section 4 of this Chapter.

Senior management shall apprise the investment services provider's board of directors, its supervisory board or, failing that, its body responsible for supervision, if such a body exists, of the appointment of the compliance officer.

I.- The investment services provider shall ensure that natural persons acting on its behalf have the minimum qualification as well as a sufficient level of knowledge.

II. - It verifies that the persons carrying out one of the following functions can prove they have the minimum level of knowledge set forth in Point 1° of II of Article 312-5:

a) asset manager, within the meaning of Article 312-4;

b) head of financial instrument clearing, within the meaning of Article 312-4;

c) head of post trade services, within the meaning of Article 312-4;

d) persons referred to in Article 312-21.

III. - The investment services provider shall not carry out the verification provided for in II with regard to persons employed as at 1 July 2010. Persons having passed one of the examinations referred to in Point 3° of II of Article 312-5 shall be deemed to have the minimum knowledge required to perform their duties.

IV. - To conduct the verification referred to in II, the investment services provider has six months from the date on which the employee starts to perform one of the above functions. However, where the employee has been taken on under a work/study contract, as provided in Articles L. 6222-1 and L. 6325-1 of the labour code, the investment services provider may not conduct such verification. If it decides to hire the employee when his or her training period finishes, the investment services provider shall ensure that he or she has the minimum qualification as well as a sufficient level of knowledge as referred to in I, at the latest by the end of the contract training period.

The investment services provider shall ensure that any employee whose minimum knowledge has not yet been verified is appropriately supervised.

1. An asset manager is any person authorised to take investment decisions in connection with an individual investment mandate;

2. A head of financial instrument clearing is a natural person representing the clearing member before the clearing house with respect to transaction registration, risk organisation and supervision, and the related financial instrument clearing functions;

3. A head of post-trade services is a person who assumes direct responsibility for custody account keeping, settlement, depositary functions, securities administration or securities services for issuers.

I. - The AMF has formed a Financial Skills Certification Board.

1. the Financial Skills Certification Board issues opinions at the request of the AMF concerning certification of the professional knowledge of natural persons acting under the authority or on behalf of an investment services provider and performing one of the functions referred to in Articles 312-3 (II), 314-9 and 314-10 ;

2. The Financial Skills Certification Board issues opinions at the request of the AMF on the need to introduce optional or mandatory modules in addition to the content of minimum knowledge, and on the functions subject to these modules;

3. when rendering opinions, the Financial Skills Certification Board considers the possibility of establishing equivalencies with similar schemes abroad.

II. - Further to an opinion of the Financial Skills Certification Board, the AMF:

1. Determines the content of the minimum knowledge to be acquired by natural persons acting under the authority or on behalf of an investment services provider and performing one of the functions referred to in Articles 312-3 (II), 314-9 and 314-10. It shall publish that content:

2. defines the content of the modules completing the minimum knowledge mentioned in 1°. It shall publish the content of these modules;

3. ensures that the content of this minimum knowledge and complementary modules is updated;

4. determines and verifies the arrangements for the examinations and complementary modules that validate acquisition of knowledge;

5. certifies examinations for a two-year period within four months of the filing of applications. This deadline shall be extended as necessary until requests for further information are met. This certification can be renewed for a three-year period.

6. the AMF shall charge an application fee when applications for certification are filed.

III. The Financial Skills Certification Board has at least seven members:

1. one person appointed from among its own members by the AMF Board;

2. at least four members named by the AMF on the basis of their professional skills, after consulting with the main professional associations representing investment services providers;

3. two independent persons named by the AMF and skilled in the fields of education or vocational training in finance.

The member of the AMF Board chairs the Financial Skills Certification Board. However, in the event of a temporary absence of the chairperson lasting no more than six months, the Financial Skills Certification Board shall choose another of its members to chair its meetings. In the event of an absence of more than six months or if the chairperson is permanently unable to fulfil their duties, the Board shall appoint another of its members as its chairperson, for the remainder of the chairperson's term of office.

The members of the Financial Skills Certification Board are appointed for a renewable three-year term. The chairperson of the Financial Skills Certification Board will continue in office until the end of their term as member of the Board. The AMF publishes a list of members.

IV. - The Financial Skills Certification Board shall draw up bylaws and present them to the AMF Board.

V. - Members of the Financial Skills Certification Board receive no remuneration for their duties. The chair of the Financial Skills Certification Board shall be compensated in accordance with the conditions set out in the AMF's internal rules.

The investment services provider shall comply with the following obligations to safeguard its clients' rights in relation to the financial instruments belonging to them:

1. It must keep such records and accounts as are necessary to enable them at any time and immediately to distinguish assets held for one client from assets held for other clients, and from its own financial instruments.

2. It must maintain its records and accounts in a way that ensures their accuracy, and in particular, their correspondence to the financial instruments held by clients, and that enables them to be used as an audit trail;

3. It must conduct periodic reconciliations between its internal accounts and records and those of the third parties with whom the clients' financial instruments are held.

4. It must take the necessary steps to ensure that any client financial instruments deposited with a third party can be identified separately from the financial instruments belonging to the third party and from the financial instruments belonging to the investment services provider by means of differently titled accounts on the books of the third party or other equivalent measures that achieve the same level of protection;

   If the law applicable in the territory in which the third party holds the financial instruments prevents that party from complying with the previous subparagraph, the third party shall inform affected clients that they are not covered by this protection.

5. It must introduce adequate organisational arrangements to minimise the risk of loss or diminution of clients' assets or of rights in connection with those financial instruments resulting from misuse of the financial instruments, fraud, poor administration, incorrect record-keeping or negligence.

The investment services provider shall ensure that the statutory auditor makes a report at least every year to the AMF on the adequacy of the arrangements made by the service provider, pursuant to points of Article II 7° and 9° L. 533-10 of the Monetary and Financial Code and this sub-section.

The investment services provider using a third party to hold its clients' financial instruments shall exercise all due skill, care and diligence in the selection, appointment and periodic review of the third party and of the arrangements made by said party for the holding of those financial instruments.

The investment services provider shall take into account the expertise and market reputation of the third party, as well as any legal or regulatory requirements or market practices related to the holding of those financial instruments that could adversely affect clients' rights.

If the investment services provider propose to use a third party to hold its clients' financial instruments then this investment services provider shall choose a third party that is located in a country that has specific regulations and supervision regarding the holding of financial instruments on behalf of a client, and shall select that third party from among those subject to the specific regulations and supervision and do so in accordance with the provisions of Article 312-8.

The investment services provider may not use a third party to hold its clients' financial instruments if that third party is located in a State that is not party to the European Economic Area agreement and that does not regulate the holding of financial instruments on behalf of another person, unless one of the following conditions is met:

1. The nature of the financial instruments or of the investment services connected with those instruments requires them to be deposited with a third party in the State that is not party to the European Economic Area agreement.

2. If the financial instruments are held on behalf of a professional client, that client makes a written request to the investment services provider to have them held with a third party in the State that is not party to the European Economic Area agreement.

The requirements set forth in Articles 312-9 and 312-10 shall also apply if the third party uses another third party to perform one of its functions in the areas of holding or custody of financial instruments.

I.- The investment services provider may not enter into securities financing transactions in respect of financial instruments held by it on behalf of a client or otherwise use such financial instruments for its own account, for the account of another person or for the account of one of its other clients, unless the client has given his prior express consent for the use of the instruments on specified terms, as evidenced by his signature or an equivalent alternative mechanism.

The use of that client's financial instruments must be restricted to the specified terms to which the client has consented.

II. - The investment services provider may not enter into securities financing transactions in respect of financial instruments held by it on behalf of a client in an omnibus account maintained by a third party, or otherwise use financial instruments held in such an account for its own account or for the account of another person unless at least one of the following conditions is met:

1. Each client whose financial instruments are held on an omnibus account must have given consent in accordance with I.

2. The investment services provider must have systems and controls to ensure that only financial instruments belonging to clients who have given prior consent in accordance with I are so used.

The investment services provider' records shall include data on the client on whose instructions the financial instruments have been used and on the number of financial instruments used belonging to each client who has given his consent, so as to enable the correct allocation of any loss of financial instruments.

III. – A “securities financing transaction” means a transaction as defined by Article 3 (11) of Regulation (EU) 2015/2365 of 25 November 2005 on transparency of securities financing transactions and of reuse.

Security interests, liens or rights of set-off over client financial instruments enabling a third party to dispose of client's financial instruments in order to recover debts that do not relate to the client or provision of services to the client are not permitted except where this is required by applicable law in a third country jurisdiction in which the client financial instruments are held.

If the investment services provider is obliged to create such security interests, liens or rights of set-off, it must disclose that information to its clients indicating to them the risks associated with those arrangements.

Where security interests, liens or rights of set-off are established by the service provider in respect of client financial instruments, or where the service provider has been informed that they are established, they shall be recorded in client contracts and the service provider's own accounts to ensure that these financial instruments are clearly identified as belonging to the client, particularly in the event of an insolvency.

I.- The investment services provider shall make information pertaining to clients' financial instruments readily available to the following persons or entities:

1. the AMF;

2. the mandataire judiciaire, administrateur judiciaire, liquidateur and commissaire à l'exécution du plan referred to in Annex B of Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings;

3. the Resolution College of the Autorité de contrôle prudentiel et de résolution.

II.- The information to be made available shall include:

1. related internal accounts and records that readily identify the balances of financial instruments held for each client;

2. the place where financial instruments are held by the service provider as well as details on the accounts opened with third parties and on agreements entered into with such entities;

3. details of any outsourced tasks relating to the holding of financial instruments and details of third parties carrying out such tasks;

4. key individuals of the service provider involved in related processes, including those responsible for oversight of the service provider's requirements in relation to the safeguarding of client financial instruments; and

5. agreements making it possible to establish client ownership over financial instruments.

The investment services provider shall take appropriate measures to prevent the unauthorised use of client financial instruments for its own account or the account of any other person, such as:

1. the conclusion of agreements with clients on measures to be taken by the investment services provider in case the client does not have provision on its account at the settlement date, such as the borrowing of the corresponding financial instruments on behalf of the client or unwinding the position;

2. the close monitoring by the service provider of its projected ability to deliver on the settlement date and the putting in place of remedial measures if this cannot be done; and

3. the close monitoring and prompt requesting of undelivered financial instruments outstanding on the settlement day.

Where the investment services provider has taken part in a securities financing transaction, it shall adopt specific arrangements for every client to ensure that, in the event that a client loans financial securities, the borrower provides appropriate collateral. The service provider shall monitor the continued appropriateness of such collateral and take the necessary steps to maintain the balance with the value of client financial instruments.

The investment services provider shall not enter into arrangements which are prohibited under Article L. 533-10 (II) (9) of the Monetary and Financial Code.

I.- The investment services provider should consider the appropriateness of title transfer collateral arrangements used with professional clients and eligible counterparties with regard to the relationship between the client's obligations to the provider and the client financial instruments and funds subject to the abovementioned arrangements.

At the request of the AMF, the service provider must be able to demonstrate, by any means, that it has undertaken these steps.

II.- When considering the appropriateness of using title transfer collateral arrangements pursuant to I, the investment services provider shall take into account all of the following factors:

1. there is a sufficiently strong present or future connection between the client's obligations towards the service provider and the use of title transfer collateral arrangements;

2. the amount of financial instruments and funds subject to the title transfer collateral arrangement does not substantially exceed the client's obligations, or is not unlimited, and whether the client has an obligation of any kind towards the service provider; and

3. if all client financial instruments and funds are subject to title transfer collateral arrangements, irrespective of the respective obligations of each client towards the service provider.

III.- When using title transfer collateral arrangements pursuant to I, the investment services provider should warn professional clients and eligible counterparties about the risks incurred and about the effects of title transfer collateral arrangements on the client's financial instruments and funds.

The investment services provider should appoint a single officer who shall possess the requisite skills and authority and be placed specifically in charge of issues relating to the service provider's compliance with its obligations in terms of safeguarding client financial instruments and funds.

The investment services provider may decide, while taking care to ensure compliance with this sub-section, whether the single officer shall be devoted solely to this assignment or whether the officer can discharge these duties effectively while also carrying out other duties.

If the investment services provider's authorisation is revoked, the AMF may require said provider to retain all the relevant records for the five-year period stipulated in Article L. 533-10 (III) of the Monetary and Financial Code.

The AMF may, in exceptional circumstances, require investment services providers to retain any or all those records for the seven year period stipulated in Article L. 533-10 (III) of the Monetary and Financial Code, to the extent justified by the nature of the instrument or transaction, if that is necessary to enable it to exercise its supervisory functions.

The purpose of recording telephone conversations shall be to facilitate monitoring to ensure that transactions are lawful and that they comply with clients' instructions.

The compliance officer may listen to the recordings of telephone conversations made pursuant to Article 76 of Commission Delegated Regulation (EU) 2017/565 of 25 April 2016. If the compliance officer does not himself listen to the recording, it may not be listened to without his agreement or the agreement of a person designated by him.

Investment services providers shall retain information about the monitoring and assessments referred to in Point a) of Paragraph 2 of Article 76 of Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 in accordance with the requirements referred to in Article 76 of the same Regulation.

Within four-and-a-half months of the end of the financial year, the investment services provider providing portfolio management services for third parties shall send the AMF the information specified on the annual data sheet.

The provisions of this section shall apply to investment service providers who provide the investment service mentioned in 4 of Article L. 321-1 of the Monetary and Financial Code.

The following terms shall have the following meanings for the purposes of this Section:

• “counterparty risk” means the risk of loss for the individual portfolio resulting from the fact that the counterparty to the transaction or to a contract may default on its obligations prior to the final settlement of the transaction's cash flow;

• “liquidity risk” means the risk that a position in the portfolio cannot be sold, liquidated or closed out at limited cost in an adequately short time frame and that the ability of the investment service provider to liquidate positions in an individual portfolio in accordance with the contractual requirements of the portfolio management mandate, is thereby compromised;

• “market risk” means the risk of loss for the individual portfolio resulting from a fluctuation in the market value of positions in the portfolio attributable to changes in market variables, such as interest rates, foreign exchange rates, equity and commodity prices, or an issuer's creditworthiness;

• “operational risk” means the risk of loss for the individual portfolio resulting from inadequate internal processes and failures in relation to people and systems of the investment service provider or from external events, and includes legal and documentation risk and risk resulting from the trading, settlement and valuation procedures operated on behalf of the individual portfolio;

• “board of directors” means the board of directors, executive board or any equivalent body of the investment service provider.

The manufacturer shall comply with the provisions of this section when it manufactures financial instruments.

It shall comply, in a way that is appropriate and proportionate, with the provisions of Articles 313-4 to 313-17, taking into account the nature of the financial instrument, the investment service and the target market for the financial instrument.

The manufacturer shall establish, implement and maintain procedures and measures to ensure the manufacturing of financial instruments complies with the provisions on proper management of conflicts of interest, including remuneration.

In particular, the manufacturer shall ensure that the manufacturing of the financial instrument, including its features, does not adversely affect end clients or does not lead to problems with market integrity by enabling it to mitigate or transfer its own risks or exposure to any underlying assets of the financial instrument that it already holds on own account.

The manufacturer must analyse potential conflicts of interest each time a financial instrument is manufactured.

In particular, it shall assess whether the financial instrument creates a situation where end clients may be adversely affected if they take, by investing in, buying, selling or establishing such an instrument:

1. an exposure opposite to the one held by the manufacturer before investing in, purchasing or establishing the financial instrument; or

2. an exposure opposite to the one that the manufacturer wants to hold after investing in, selling or establishing the financial instrument.

The manufacturer should consider whether the financial instrument may represent a threat to the orderly functioning or to the stability of financial markets before deciding to proceed with the launch of the financial instrument.

The manufacturer shall ensure that relevant staff involved in the manufacturing of financial instruments possess the necessary expertise to understand the characteristics and risks of these financial instruments.

The manufacturer shall ensure that senior managers mentioned as applicable in points 1° and 2° of Articles L. 533-25 and L. 511 51 of the Monetary and Financial Code or in Article R. 123-40 of the Commercial Code have effective control over the financial instrument governance process.

It shall ensure that compliance reports to the senior managers mentioned in the previous subparagraph include information about the financial instruments manufactured by it, including information on the distribution strategy for these instruments.

It shall make the reports available to the AMF on request.

The manufacturer shall ensure that the compliance function checks and monitors the development and periodic review of financial instrument governance arrangements in order to detect any risk of failure by it to comply with the obligations set out in this section.

Where several manufacturers or one or several manufacturers and one or several other persons referred to in Article 313-1 (II) or (III) collaborate to develop, issue or design a financial instrument, these persons shall outline their mutual responsibilities under this collaboration in a written agreement.

The manufacturer shall define in sufficient detail the potential target market for each financial instrument and specify the type(s) of client(s) that have needs, characteristics and objectives, including possibly sustainability objectives, with which the financial instrument is compatible.

As part of this process, it shall define any group(s) of clients that have needs, characteristics and objectives that are not compatible with this instrument. However, if this instrument takes into account sustainability factors within the meaning of by Point 24 of Article 2 of Regulation (EU) 2019/2088 of the European Parliament and of the Council, these shall not in any way be considered as incompatible.

Where manufacturers or one manufacturer and one or several other persons referred to in Article 313-1 (II) collaborate to manufacture a financial instrument, only one target market needs to be identified.

Where the manufacturer is not also the distributor of a financial instrument, and where the financial instrument is distributed through one or several distributors, the manufacturer shall determine the financial instrument's compatibility with the needs and characteristics of clients based on:

1. their theoretical knowledge of and past experience with:

   1. the financial instrument or similar financial instruments; and

   2. financial markets; and

2. the needs, characteristics and objectives of potential end clients.

I.- The manufacturer shall undertake an analysis for each financial instrument that it manufactures to assess:

1. the risks of poor outcomes for end clients posed by the financial instrument; and

2. in which circumstances these outcomes may occur.

II.- It shall assess the financial instrument under negative conditions covering what would happen if, for example:

1. the market environment deteriorates;

2. the manufacturer or a third party involved in manufacturing and or functioning of the financial instrument experiences financial difficulties or other counterparty risk materialises for the manufacturer or the third party;

3. the financial instrument fails to become commercially viable; or

4. demand for the financial instrument is much higher than anticipated, compromising its financial position or disrupting the market of the underlying assets.

The manufacturer shall determine whether a financial instrument meets the identified needs, characteristics and objectives of the target market, including by examining:

1. the financial instrument's risk/reward profile is consistent with the target market; and

2. if the sustainability factors of the financial instrument, as defined by Point 24 of Article 2 of Regulation (EU) 2019/2088 of the European Parliament and of the Council, are compatible with the target market;

3. financial instrument design is driven by features that are in the client's interest and not by a business model that relies on poor client outcomes in order to be profitable for the manufacturer.

The manufacturer shall consider the charging structure proposed for the financial instrument, including by examining the following:

1. financial instrument's costs and charges are compatible with the needs, objectives and characteristics of the target market;

2. costs and charges do not undermine the financial instrument's return expectations, such as where the costs or charges equal, exceed or remove almost all the expected tax advantages linked to a financial instrument; and

3. the charging structure of the financial instrument is appropriately transparent for the target market, and does not disguise charges or make them too complex to understand.

The manufacturer shall ensure that the provision of information to distributors includes information about the appropriate channels for distribution of the financial instrument, the financial instrument approval process and the target market assessment and is of an adequate standard to enable distributors to understand and recommend or sell the financial instrument properly.

The sustainability factors of the financial instrument, as defined by Point 24 of Article 2 of Regulation (EU) 2019/2088 of the European Parliament and of the Council, shall be presented in a transparent manner and shall provide distributors with relevant information to enable them to take due account of any sustainability objectives pursued by the client or potential client.

The manufacturer shall review the financial instruments it manufactures on a regular basis, taking into account any event that could materially affect the potential risk to the identified target market.

It shall consider if the financial instrument remains consistent with the needs, characteristics and objectives, including any sustainability objectives, of the target market and if it is being distributed to the target market, or is reaching clients for whose needs, characteristics and objectives the financial instrument is not compatible.

I.- The manufacturer shall:

1. review, if it is aware of any event that could materially affect the potential risk to investors, any financial instrument prior to:

   1. any further issue of financial instruments with similar characteristics;

   2. any issue of a financial instrument that is fungible with a previously issued financial instrument; or

   3. any new financial contract; and

2. conduct reviews at regular intervals to assess whether the financial instrument functions as intended.

II.- It shall determine how regularly to review manufactured financial instruments based on relevant factors, including factors linked to the complexity or the innovative nature of the investment strategies pursued.

III.- It shall also identify crucial events that would affect the potential risk or return expectations of the financial instrument, such as:

1. the crossing of a threshold that will affect the return profile of the financial instrument; or

2. the solvency of certain issuers whose securities or guarantees may impact the performance of the financial instrument.

IV.- When such events occur, it shall take appropriate action which may consist in:

1. providing relevant information on the event and its consequences on the financial instrument to the clients or the distributors of the financial instrument if the manufacturer does not offer or sell the financial instrument directly;

2. changing the financial instrument approval process;

3. stopping further issuance of the financial instrument;

4. changing the financial instrument's contractual stipulations to avoid any unfair terms;

5. considering whether the sales channels through which the financial instruments are distributed are appropriate where it becomes aware that the financial instrument is not being sold as envisaged;

6. contacting the distributor to discuss a modification of the distribution process;

7. terminating the relationship with the distributor; or

8. informing the AMF.

The distributor, when deciding the range of financial instruments manufactured by itself or other persons and services it intends to offer or recommend to clients, shall comply, in a way that is appropriate and proportionate, with the requirements laid down in Articles 313-19 to 313-27, taking into account the nature of the financial instrument, the investment service and the target market for the financial instrument.

Distributors shall also comply with the provisions of this section when offering or recommending financial instruments manufactured by a manufacturer referred to in Article 313-1 (III).

It shall have in place effective arrangements to ensure that it obtains sufficient information about these financial instruments from the person mentioned in the previous subparagraph.

It shall determine the target market for each financial instrument, even if the target market was not defined by the manufacturer referred to in Article 313-1 (I to III).

The distributor shall put in place adequate financial instrument governance arrangements to ensure that financial instruments and services it intends to offer or recommend are compatible with the needs, characteristics, and objectives, including any sustainability objectives, of an identified target market and that the intended distribution strategy is consistent with the identified target market.

It shall identify and assess the circumstances and needs of the clients it intends to focus on, so as to ensure that clients' interests are not compromised as a result of commercial or funding pressures.

As part of this process, it shall define any group(s) of clients that have needs, characteristics and objectives that are not compatible with this instrument. However, if this instrument takes into account sustainability factors within the meaning of by Point 24 of Article 2 of Regulation (EU) 2019/2088 of the European Parliament and of the Council, these shall not in any way be considered as incompatible.

The distributor shall obtain from the manufacturer or the person referred to in Article 313-1 (II) information to gain the necessary understanding and knowledge of the financial instruments its intend to recommend or sell in order to ensure that these instruments will be distributed in accordance with the needs, characteristics and objectives of the identified target market.

The distributor shall also take all reasonable steps to ensure it also obtains adequate and reliable information from any person referred to in Article 313-1 (III) to ensure that financial instruments will be distributed in accordance with the characteristics, objectives and needs of the target market.

Where relevant information is not publicly available, the distributor shall take the necessary steps to obtain such relevant information from the person referred to in Article 313-1 (III) or from anyone acting on that person's behalf.

Acceptable publicly available information is information which is clear, reliable and produced to meet legal or regulatory requirements, such as investor disclosure requirements under Directive 2003/71/EC of 4 November 2003 or Directive 2004/109/EC of 15 December 2004.

This obligation applies to products sold on primary and secondary markets and shall apply in a proportionate manner, depending on the degree to which publicly available information is obtainable and the complexity of the product.

The distributor shall use the information obtained from the persons referred to Article 313-1 (I to III) and information on its own clients to identify the target market and distribution strategy.

When a distributor acts both as a manufacturer and a distributor, only one target market assessment shall be required.

When deciding the range of instruments and services that it offers or recommends and the respective target markets, the distributor shall establish and maintain procedures and measures to ensure compliance with all applicable provisions under Directive 2014/65/EU of 15 May 2014 including those relating to client disclosure, assessment of suitability or appropriateness of the financial instrument for the client, inducements and proper management of conflicts of interest.

Particular care shall be taken when it intends to offer or recommend new financial instruments or there are variations to the services it provides.

The distributor shall periodically review and update its financial instrument governance arrangements in order to ensure that they remain robust and fit for their purpose, and take appropriate actions where necessary.

The distributor shall review the financial instruments it distributes and the services it provides on a regular basis, taking into account any event that could materially affect the potential risk to the identified target market.

It shall assess whether the instrument or services remain adapted to the needs, characteristics and objectives, including any sustainability objectives, of the identified target market and whether the intended distribution strategy remains appropriate.

It shall modify the identified target market and if necessary update the product governance arrangements if it becomes aware that it has wrongly identified the target market for a specific financial instrument or service or that the instrument or service no longer meets the expectations of the identified target market, and notably if the financial instrument becomes illiquid or very volatile due to market changes.

The distributor shall ensure that its compliance function checks the conditions and procedures for the development and periodic review of financial instrument governance arrangements in order to detect any risk of failure to comply with the obligations set out in this section.

The distributor shall ensure that relevant persons possess the necessary expertise to understand the characteristics and risks of the financial instruments that it intends to distribute and the services provided as well as the needs, characteristics and objectives of the identified target market.

The distributor shall ensure that senior managers mentioned as applicable in points 1° and 2° of Articles L. 533-25 and L. 511-51 of the Monetary and Financial Code or in Article R. 123-40 of the Commercial Code or the management body of an asset management company have effective control over the financial instrument governance process to determine the range of financial instruments that it distributes and the services provided to the target markets.

It shall ensure that the compliance reports referred to in Article 22(2)(c) of Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 provided to the senior managers mentioned in the previous subparagraph include information about the financial instruments distributed and the services provided. The compliance reports shall be made available to the AMF on request.

The distributor shall provide to the relevant manufacturer or person referred to in Article 313-1 (II) with information on sales and, where appropriate, information on the reviews that it has conducted pursuant to Articles 313-21 to 313-23 to support the manufacturer or person referred to in Article 313-1 (II) when it carries out the reviews referred to in Articles 313-9, 313-16 and 313 17.

Where different distributors work together in the distribution of a financial instrument or service, any distributor with a direct client relationship has ultimate responsibility to meet the product governance obligations set out in this section.

A distributor acting as an intermediary shall:

1. ensure that relevant information about the financial instrument obtained from the manufacturer or person referred to in Article 313-1 (II) is passed to the final distributor in the chain;

2. take the necessary measures to enable the manufacturer or the person referred to in Article 313-1 (II) who requests information on sales of a financial instrument to obtain that information in order to comply with their own financial instrument governance obligations; and

3. apply the financial instrument governance obligations for manufacturers, as relevant, within the framework of the services that it provides.

The provisions of this Chapter shall not apply to branches established in other States party to the European Economic Area agreement by investment services providers authorised in France.

Investment services providers shall ensure that relevant persons are reminded that they are bound by the obligation of professional confidentiality, subject to the terms and penalties prescribed by law.

For the purposes of this Chapter, the term "client" shall designate existing and potential clients.

For the purposes of 2° of III of Article L. 533-13 of the Monetary and Financial Code, a service may be deemed to have been provided at the client's initiative if the client requests it following any communication containing a promotion or offer of financial instruments made by any means and which is nature a general communication addressed to the public or a broader group or category of clients.

A service may not be deemed to have been provided at the client's initiative if the client requests it following a personalised communication addressed to him by the investment services provider or in its name that invites the client, or attempts to invite the client, to take an interest in a given financial instrument or transaction.

I.- The investment services provider shall ensure that natural persons acting on its behalf as sales personnel have the minimum qualification as well as a sufficient level of knowledge.

Sales personnel shall mean any natural person responsible for providing investment advices or informations on financial instruments, investment or ancillary services, to the clients of the investment services provider on whose behalf he is acting;

II. - It verifies that the sales personnel can prove they have the minimum level of knowledge set forth in Point 1° of II of Article 312-5:

III. - The investment services provider shall not carry out the verification provided for in II with regard to persons employed as at 1 July 2010. Persons having passed one of the examinations referred to in Point 3° of II of Article 312-5 shall be deemed to have the minimum knowledge required to perform their duties.

IV. - To conduct the verification referred to in II, the investment services provider has six months from the date on which the employee starts to perform one of the above functions. However, where the employee has been taken on under a work/study contract, as provided in Articles L. 6222-1 and L. 6325-1 of the labour code, the investment services provider may not conduct such verification. If it decides to hire the employee when his or her training period finishes, the investment services provider shall ensure that he or she has the minimum qualification as well as a sufficient level of knowledge as referred to in I, at the latest by the end of the contract training period.

The investment services provider shall ensure that any employee whose minimum knowledge has not yet been verified is appropriately supervised.

When an investment services provider ensures that the persons who provide investment advice or information on financial instruments, investment services or ancillary services to clients, on its behalf, possess the necessary knowledge and competence in accordance with Article L. 533-12-6 of the Monetary and Financial Code, it may consider that it has fulfilled its obligations in terms of the verification of the minimum knowledge levels provided for in II of Article 314-9, subject to the regular update of their skills and knowledge.

An investment services provider shall ensure that the persons referred to in the first paragraph, when they do not yet possess an appropriate level of knowledge and competence, acquire them within a period of six months full-time equivalent from the date on which they took on their functions. During this period, these persons shall be supervised by one or more member(s) of the staff of the investment services provider who possess the adequate qualifications and experience.

Investment services providers providing portfolio management services shall define the planned allocation of the orders they give beforehand. As soon as they learn that they orders have been executed, they shall transmit to the account keeper exact instructions for the allocation of the orders executed to the beneficiaries. This allocation shall be final.

Investment services providers authorised before 10 November 2021 to provide the investment service referred to in point 5 of Article L. 321-1 of the Monetary and Financial Code and offering financial securities via a website as provided for in Article 325-48 in the version applicable before the date of publication of the Order of 9 March 2022 approving the amendments to the AMF General Regulation, shall remain subject to the provisions of Article 314-31 in the version applicable before the date of publication of the aforementioned order:

- either until 10 November 2022 or until the date specified in the delegated act adopted, where applicable, pursuant to Article 48(3) of Regulation (EU) 2020/1503 of the European Parliament and of the Council of 7 October 2020;

- or until it obtains authorisation as a provider of equity crowdfunding services;

whichever is the earlier.

Within six months of the end of the financial year, investment services providers shall send the AMF, in accordance with Article D. 533-16-1 of the Monetary and Financial Code, an annual report containing the information referred to in III of the same article.

Pursuant to Article L. 621-8-4 of the Monetary and Financial Code, the investment services providers referred to in the first paragraph shall send the AMF:

1. The information required by an AMF instruction to enable the work prescribed by Article 4 of Decree 2021-663 of 27 May 2021 to be carried out. This information shall be sent to the AMF within one month of publication of the annual report referred to in the first paragraph of this article;

2. The information required by Article 4 of Commission Delegated Regulation (EU) 2022/1288 of 6 April 2022 shall be sent to the AMF by the same date as that provided for in this article.

The AMF may authorise an investment services provider to defer the publication of transactions in the financial instruments referred to in paragraph 1 of Article 21 of Regulation (EU) No 600/2014 of 15 May 2014 in the cases described in paragraph 4 of this same Article.

Investment services providers shall have organisational structures and procedures that enable them to comply with the vigilance and disclosure requirements provided for in Title VI of Book V of the Monetary and Financial Code relating to the fight against money laundering and terrorist financing.

Investment services providers authorised before 10 November 2021 to provide the investment service referred to in 5 of Article L. 321-1 of the Monetary and Financial Code and offering financial securities via a website as provided for in Article 325-48 in the version applicable before the date of publication of the Order of 9 March 2022 approving the amendments to the AMF General Regulation, shall remain subject to the provisions of Article 315-9 in the version applicable on the date of publication of the aforementioned order:

- either until 10 November 2022 or until the date specified in the delegated act adopted, where applicable, pursuant to paragraph 3 of Article 48 of Regulation (EU)2020/1503 of the European Parliament and of the Council of 7 October 2020;

- or until it obtains authorisation as a provider of equity crowdfunding services;

whichever is the earlier.

To benefit from the exemption provided for by Article 13 of Regulation (EU) no.596/2014 of the European Parliament and of the Council of 16 April  2014 on market abuse, any investment services provider using an accepted market practice shall comply with the requirements set out in the AMF decision that established said accepted market practice in application of the above-mentioned Regulation.

A systematic internaliser within the meaning of Article L. 533-32 of the Monetary and Financial Code shall inform the AMF when it acts as a systematic internaliser for one of the categories of financial instruments mentioned in paragraph 1 of Articles 14 and 18 of Regulation (EU) No. 600/2014 of 15 May 2014 and when it ceases to act as a systematic internaliser for this category.

A systematic internaliser may, in accordance with paragraph 2 of Article 18 of Regulation (EU) No 600/2014, be waived from pre-trade disclosure requirements in the cases described in paragraph 1 of Article 9 of said Regulation.

The AMF may authorise systematic internalisers to defer publication of transactions in the financial instruments referred to in Article 21, paragraph 1 of Regulation (EU) No 600/2014 of 15 May 2014 in the cases described in paragraph 4 of said Article.

An asset management company seeking to create and manage an AIF or provide investment services in another State of the European Union, under the freedom to provide services or under the right of establishment, shall notify the AMF of its plans in accordance with Articles R. 532-25-1 et R. 532-30 of the Monetary and Financial Code.

The date of entry into force of the present Section is set in accordance with the provisions of the European Commission delegated act provided for in Paragraph 6 of Article 67 of Directive 2011/61/EU of the European Parliament and Council of 8 June 2011.

Without prejudice to Article L. 532-9 of the Monetary and Financial Code, no authorisation shall be granted unless the following additional conditions are fulfilled:

1. The manager appoints France as its reference Member States in accordance with the criteria set out in Article R. 532-31 of the same Code and the appointment is backed up by the disclosure of its marketing strategy;

2. The manager has appointed a legal representative established in France;

3. The legal representative is, with the manager, the contact point of the manager for holders of units or shares in the AIFs in question, for the European Securities and Markets Authority and for the AMF and the competent authorities concerning the activities for which the manager is authorised in the European Union and shall be equipped to perform its compliance function by virtue of the legislative and regulatory provisions applicable to asset management companies;

4. There are appropriate cooperation arrangements in place between France, the competent authorities of the Member State of reference of the European Union AIFs concerned and the supervisory authorities of the third country where the manager is established in order to ensure an efficient exchange of information that allows the AMF and the competent authorities to carry out the duties incumbent upon them;

5. The third country where the manager is established is not listed as a Non-Cooperative Country and Territory by FATF;

6. The third country where the manager is established has signed an agreement with France, which fully complies with the standards laid down in Article 26 of the OECD Model Tax Convention on Income and on Capital and ensures an effective exchange of information in tax matters, including any multilateral tax agreements;

7. The effective exercise by the AMF of its supervisory functions is neither prevented by the laws, regulations or administrative provisions of the third country governing the manager, nor by limitations in the supervisory and investigatory powers of that third country's supervisory authorities.

The authorisation of the AIF manager shall be granted in accordance with Article L. 532-36 of the Monetary and Financial Code, subject to the following criteria:

1. The information referred to in Article L. 532-9 of the same code is supplemented by:

   1. A justification by the manager of its assessment regarding the Member State of reference in accordance with the criteria set out in Article R. 532-31 of the same code with information on the marketing strategy;

   2. A list of the legislative and regulatory provisions applicable to asset management companies of AIFs for which compliance by the manager is impossible, as compliance by the manager with those provisions is incompatible with compliance with a mandatory provision in the law to which the manager established in a third country or the third-country AIF marketed in the Union is subject;

   3. Written evidence based on the regulatory technical standards developed by ESMA that the relevant third-country law in question provides for a rule equivalent to the provisions for which compliance is impossible, which has the same regulatory purpose and offers the same level of protection to the investors of the relevant AIFs and that the manager complies with that equivalent rule. Such written evidence shall be supported by a legal opinion on the existence of the relevant incompatible mandatory provision in the law of the third country and including a description of the regulatory purpose and the nature of the investor protection pursued by it;

   4. The name of the legal representative of the manager and the place where it is established;

2. The information referred to in Article 316-3, Points 1 to 6 may be limited to the EU AIFs the manager intends to manage and to those AIFs it manages and intends to market in the European Union with a passport;

3. The second paragraph of Article L. 532-9, II of the Monetary and Financial Code is without prejudice to Article L. 532- 31 of the same code;

4. Point 1 of Article L. 532-9, II of the Monetary and Financial Code is not applicable;

5. The fifth paragraph of Article 316-4 shall be understood as including a reference to the "information referred to in Article L. 532-37 of the Monetary and Financial Code".

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The asset management company shall have its registered office in France. It may be incorporated in any form, subject to a review of the compatibility of its instruments of incorporation with the laws and regulations applicable to it, and provided that its accounts are subject to a statutory audit.

I. - The share capital of asset management companies shall be equal to a minimum of EUR 125,000 and must be fully paid in cash at least to this minimum amount.

II. - When authorisation is granted and in subsequent financial years, the asset management company must be able to prove at any time that its level of own funds is at least equal to the higher of the two amounts referred to in Points 1 and 2 below:

1. EUR 125,000 plus an amount equal to 0.02 % of the amount by which the assets under management by the asset management company exceeds EUR 250 million.

   The total own funds requirement shall not exceed EUR 10 million.

   The assets included in the calculation of the additional own funds requirement referred to in the third paragraph are:

   1. French or foreign AIFs in corporate form that have globally delegated management of their portfolio to the asset management company;

   2. French or foreign AIFs in fund form managed by the asset management company, including portfolios for which it has delegated management but excluding portfolios that it manages on a delegated basis.

      Up to 50% of the additional own funds requirement may be met by a guarantee given by a credit institution or insurance undertaking having its registered office in a State that is a party to the European Economic Area agreement, or in another State, provided the guarantor is subject to prudential rules considered by the AMF to be equivalent to those applicable to credit institutions and insurance undertakings having their registered offices in States that are parties to the European Economic Area agreement.

2. One-quarter of general operating expenses for the previous financial year calculated in accordance with Articles 34 ter to 34 quinter of Commission Regulation (EU) No 241/2014 of 7 January 2014.

III. - The own funds requirement at the time of authorisation shall be calculated on the basis of forecast data.

For subsequent years, the amount of general operating expenses and the total value of portfolio assets used to determine the own funds requirement shall be calculated on the basis of the most recent of the following asset management company documents: financial statements for the previous financial year, interim statement of financial position certified by the statutory auditor or the data sheet referred to in Article 318-37.

IV. - To cover any potential professional liability risks resulting from AIF management activities, the asset management company must:

1. Either have additional own funds of an amount sufficient to cover potential liability risks arising from professional negligence;

2. Or hold a professional indemnity insurance against liability arising from professional negligence which is appropriate to the risks covered.

V. - When the asset management company is also authorised by the AMF by the terms of Directive 2009/65/EC of the European Parliament and Council of 13 July 2009, it is not subject to points I, II and III the present Article.

I. The asset management company's own funds, including any additional own funds, must be invested in liquid assets or assets that can easily be converted into cash in the short term and that do not include speculative positions.

II. However, if own funds exceed 130 % at least of the regulatory own funds mentioned in Article 317-2, the excess portion of this amount may be invested in assets that do not meet the requirements of I, provided that these assets do not create a material risk for the company's regulatory own funds.

The asset management company shall disclose the identities of legal entities or individuals who are direct or indirect shareholders with qualifying holdings as well as the amounts of their hol