French Monetary and Financial Code
In forceI. - The regulations governing the fund set up to manage sums invested in application of Title III of Book III of Part III of the Labour Code relating to employee savings plans provide for the establishment of a supervisory board and the cases in which the management company must obtain the opinion of this board.
At least half of the Supervisory Board is made up of employees representing the unitholders, who are themselves unitholders, and company representatives. When the fund combines securities acquired with sums from profit-sharing reserves or paid into company savings plans set up in several companies, the regulations determine, under conditions set by decree in the Conseil d'Etat, the procedures for company representation on the supervisory board and the appointment of their representatives.
The regulations specify the procedures for appointing unitholders' representatives either by election or by choice made by the works council(s) concerned or by representative trade union organisations within the meaning of article L. 2231-1 of the Labour Code.
The Chairman of the Supervisory Board is chosen from among the representatives of the unitholders.
When the penultimate paragraph of article L. 3332-15 of the same code is applied, the fund regulations refer to the provisions specified in the savings plan regulations.
The Supervisory Board exercises the voting rights attached to the securities held in the fund and decides on the contribution of units or securities. However, the regulations may stipulate that the voting rights relating to these units or securities are to be exercised by the management company, and that the latter may decide on the contribution of units or securities, with the exception of units or securities of the company or any company affiliated to it under the conditions set out in articles L. 3344-1 and L. 3344-2 of the French Labour Code.
The Supervisory Board is responsible in particular for examining the financial, administrative and accounting management. It may ask to meet with the fund's management company, custodian and auditor, who must comply with its request to attend. It decides on mergers, demergers and liquidations. The fund rules specify the amendments to the rules that may not be decided without the approval of the Supervisory Board. Without prejudice to the powers of the management company referred to in article L. 214-24-35 of this Code and those of the liquidator referred to in article L. 214-24-45, the Supervisory Board may take legal action to defend or assert the rights or interests of unitholders.
The Supervisory Board adopts an annual report which is made available to each unitholder and the content of which is specified by the General Regulations of the Autorité des marchés financiers.
II. - The fund rules may provide that income from the fund's assets is reinvested in the fund.
III. - The fund may only be dissolved if its dissolution does not result in the loss of benefits granted to employees under the conditions set out in articles L. 3323-4, L. 3324-10, L. 3325-1 to L. 3325-4, L. 3332-14, L. 3332-25 and L. 3332-26 of the French Labour Code.
IV. - The present article also applies to funds whose assets include no more than one third of shares or securities issued by the company or by any company linked to it under the conditions set out in articles L. 3344-1 and L. 3344-2 of the Labour Code.
V. - The fund regulations specify, where applicable, the social, environmental or ethical considerations, as well as those relating to the types of companies financed, that the management company must respect when buying or selling units or securities and when exercising the rights attached to them. The fund's annual report shall give an account of their application, under conditions defined by the general regulations of the Autorité des marchés financiers.
Where the company is governed by the provisions of law no. 47-1775 of 10 September 1947 on the status of cooperative societies, the company mutual fund may invest in the shares or equity securities it issues, under conditions laid down by decree of the Conseil d'Etat and without prejudice to any specific provisions governing the subscription of such shares or securities by employees.
This article also applies to solidarity funds that can be subscribed to as part of an employee savings plan mentioned in Title III of Book III of Part Three of the Labour Code. The assets of these solidarity funds are made up of :
a) Between 5% and 10% of units or securities issued by socially responsible companies approved under article L. 3332-17-1 of the same code or by venture capital companies mentioned in article 1-I of law no. 85-695 of 11 July 1985 containing various provisions of an economic and financial nature or by venture capital mutual funds mentioned in article L. 214-28 of the present code, under the terms of article L. 3332-17-1 of the same code or by venture capital companies mentioned in article 1-I of law no. 85-695 of 11 July 1985 containing various provisions of an economic and financial nature or by venture capital mutual funds mentioned in article L. 214-28 of the present code, under the terms of article L. 3332-17-1 of the same code. 214-28 of this code, provided that the assets of these funds are made up of at least 40% of units or securities issued by socially responsible companies mentioned in article L. 3332-17-1 of the Labour Code;
b) For the remainder, units or financial securities admitted to trading on a regulated market, units of UCITS or FIAs covered by paragraphs 1, 2 and 6 of sub-section 2, sub-paragraph 1 of paragraph 1 or paragraph 2 of sub-section 3 of this section, invested in these same units or securities and, on an ancillary basis, cash.
The assets of solidarity funds may, under the conditions set out in Article L. 214-24-57 of this code, be invested in shares or units of a single UCITS or AIF mentioned in b above which complies with the composition of solidarity funds.
VI - A fonds commun de placement d'entreprise may hold a maximum of 30% of securities issued by a fonds commun de placement mentioned in article L. 214-28 or L. 214-30 or by an undertaking for collective real estate investment mentioned in paragraph 3 of sub-section 2 of this section.
VII - Without prejudice to the provisions of article L. 214-24-57, a company mutual fund which may be subscribed to as part of a company pension savings plan may hold:
1° Up to 10% of securities which are not admitted to trading on a regulated market, without prejudice to the provisions of a of V above, or up to 10% of securities of the company which set up the plan or of companies which are affiliated to it under the conditions set out in articles L. 3344-1 and L. 3344-2 of the Labour Code. This limitation does not apply to the units and shares of UCITS or FIA mentioned in b of V above held by the fund;
2° Up to 50% of units or shares of FIAs covered by paragraphs 2, 3 or 6 of sub-section 2 or paragraphs 1 or 2 of sub-section 3 of this section, under conditions laid down by decree.
