France (out of Monaco) – CM PB

2024, Cross-border, Update

Country Manual Private Banking – France (out of Monaco) BRP Update 2024

BRP SA - France out of Monaco CM PB
BRP SA – France out of Monaco CM PB

BRP has updated its Country Manual Private Banking for France (out of Monaco) – (Def, RS, BT & RT)

Source of changesAnswers
Law / RegulationNo
New Position of the AuthoritiesYes
Evolution of Expert’s InterpretationNo

Regulatory Template, Regulatory Summary and Behaviour Template

Following the publication of the decision rendered by the French Cour de Cassation on the 15th of November 2023 (see Alert BRP France 5/2023) some answers regarding investment activities undertaken with qualified prospects have been changed. Indeed, the decision confirms that the exceptions, listed under Article 341-2 of the MFC, to the direct marketing rules can also be used by third countries (and non-passported EEA) financial institutions. As a consequence, the rules concerning direct marketing do not apply, notably, to contacts with qualified prospects, in and into France. The monopoly rules remain, however, relevant when activities take place on the French territory.

You will find below a summary of some of the main changes:

In France:

  • Presenting the Bank in general terms and providing the Bank’s annual report and press reviews to qualified prospects, in France actively and passively are now also permitted on an occasional basis when relating to investment services;
  • Prospecting activities relating to investment services performed in France are now a grey zone when undertaken actively with qualified prospects. A cautious approach is recommended as they could be qualified as negotiation of investment services, due to the broad interpretation of the concept of negotiation by the French authorities. On a qualified prospect’s initiative, however, these activities seem permitted on the French territory on an occasional basis as reverse solicitation is recognised as a formal exception to the monopoly rules.

Into France:

  • Presenting the Bank in general terms, providing the Bank’s annual report and press reviews, and undertaking prospecting activities relating to investment services to or with qualified prospects into France actively are now permitted on an occasional basis;
  • Due to the monopoly rules, active negotiation of investment services into France are a grey zone for qualified prospects but seem permitted if undertaken on their initiative. The activities should in any case remain occasional, due to the “bundle of indicators” method used by the French authorities to determine if a licensable activity has been undertaken on the French territory. The Bank should, in particular, avoid systematically sending contracts to be signed in France.

  • With regard to reporting activities, due to these activities’ close connection to investment services and the restrictions applying to the provision of investment services during meetings in France, if the Bank’s representative acts on French soil on its own initiative it is recommended to only undertake reporting activities, occasionally, in connection to banking services. The answers have been changed in this sense.

Non-material changes

The condition “The representative must show the “carte de démarchage”” has been deleted from the Behaviour Template. However, although not reflected in the Behaviour Template anymore, this remains a requirement, as explained in the Regulatory Template, when soliciting non-qualified prospects on the French territory.

For general prospection activities (general presentation, marketing material, etc.), the Behaviour Template now reflects the distinction between these activities relating to banking or investment services.

Implications for business relations with third partie

Some amendments have been made to the chapter on business relations with third parties, without bringing any material changes. The aim was to bring more clarity and developments to these sections. It is worthwhile remembering that, although simple referral activities undertaken by a third-party in France for the Bank, is permitted, whenever an activity has an effect in France, French authorities can consider it to be a determinant element (according to the “bundle of indicators” method) that a licensable activity might be performed in France.

Despite the changes brought about by the above-mentioned decision with regard to the application of direct marketing rules for activities undertaken with certain types of prospects/clients, the answer for the provision of documentations for clients’ attention through an EAM (B2C) remains a “NO” for investment services. Indeed, the monopoly rules remain applicable and restrictive, regardless of the client’s status. Provision of documentation relating to investment services in France through an EAM might be seen as the Bank trying to do through the EAM what it cannot do by itself.

Regulatory Summary

This document has now a more user-friendly layout and reflects the changes contained in the RT.

BT Short Comparison

BRP has created a comparison document allowing users to quickly identify the modifications made compared to the previous version of the PB Manual (BT Short Comparison). The BT Short Comparison can be found on BRP’s platform (mybrponline) in the Search tab by entering in the Document Field “CM PB BT SHORT COMP” and “FRANCE” in the Target Country Field.

The BT Short Comparison should be read as follows:

The first column contains a short description of the activity in question. The second column contains the answers of the previous version of the Country Manual (online until the day of the alert). The third column contains the new answers of the most recent version of the Country Manual. Only the modified answers are displayed (in color). If the answers in the new version are unchanged compared to the previous version, they are shaded in grey.

For more information, please contact us:

Geneva, July 4th, 2024