Securities and Financial Instruments

I – Financial Instruments ("instruments financiers")

A list of the financial instruments in France can be found in Article L. 221-1 of the Financial and Monetary Code (Code monétaire et financier (CMF)). There are two types of financial instruments listed there:

Financial securities/Financial instruments ("titres financiers"):

1. Securities issued by the stock corporations
2. Promissory notes (commercial documents and receipts excluded)
3. Shares in organisms for collective assets/collective investments

Financial securities, which include securities/stocks and shares as mentioned in the second paragraph of article L 228-1 of the Commercial Code, can only be issued by the state, a legal entity, an investment fund or a securitisation fund.

Financial contracts ("contrats financiers"):

Financial contracts/futures (?), also called "future financial instruments", are the futures that appear in a list set by decree (D 211-1 A CMF).

II - Investment services

(1) Investment services relate to the financial instruments enumerated in article L 211-1 and include:

1. Receiving and Transmitting orders for Third Parties.
2. Executing orders for Third Parties.
3. Trading for Own Account.
4. Portfolio Management for Third Parties.
5. Financial Investment Consultancy.
6. Underwriting.
7. Placing of financial instruments on a firm commitment basis.
8. Placing of financial instruments without a firm commitment basis.
9. Operation of multilateral trading facilities.

(2) Services related to investment services include:

1. The custody or administration of financial instruments
2. The granting of credits or loans to an investor to enable him to carry out a transaction relating to a financial instrument in which the company granting the credit or loan participates
3. Asset management consultancy
4. Consultancy services provided to companies in relation to capital structure, industrial strategy and associated questions, as well as services relating to mergers and acquisitions
5. Services associated with underwriting
6. Exchange-rate services when they are associated with the provision of investment services
7. Renting of safes
8. Trading in the underlying commodities of instruments referred to in 4/II of article L 211-1, when it is associated with the performance of those contracts

The conditions in which the transactions referred to in 2 are carried out by investment firms are determined by the Minister for the Economy.

III- Investment service providers

The investment service providers are the investment firms and credit institutions which have been authorised to provide investment services within the meaning of article L 321-1.

Investment firms are legal entities, other than credit institutions, which provide investment services in the normal course of their business (L 531-4).

The provision of related services within the meaning of Article L. 321-2 is free, consistent with the laws and regulations in force applicable to each of those services. It does not, of itself, suffice to confer investment firm status.

As soon as a firm has been authorised in its home country, this authorisation counts as a "European passport". This enables the firm to establish subsidiaries in other member states or to provide their services there.

The obligations of the service providers (business management norms, accounting and reporting obligations, rules of procedure/conduct, investment guarantees) are legislated in article L 533-1 (CMF). The AMF is responsible for ensuring that these obligations are adhered to./Compliance with these obligations is enforced by the AMF.