French Monetary and Financial Code
In forceI. - The fund may have sub-funds if the company's articles of association or the fund rules so provide. Each sub-fund gives rise to the issue of units or shares and, where applicable, debt securities. Notwithstanding article 2285 of the French Civil Code and unless otherwise stipulated in the company's constitutive documents, the assets of a given sub-fund are liable only for the debts, commitments and obligations and benefit only from the rights and assets relating to that sub-fund.
II. - The conditions under which the undertaking or, where applicable, the sub-funds of the undertaking may borrow and enter into contracts constituting forward financial instruments are laid down by decree in the Conseil d'Etat. This decree also lays down the rules governing the composition of the undertaking's assets.
The assets of the financial institution may only be the subject of civil enforcement measures in compliance with the allocation rules defined by the institution's regulations or articles of association.
The rules governing the allocation of sums received by the fund are binding on unitholders, shareholders, holders of debt securities of all categories and other creditors who have accepted these rules, notwithstanding the opening against them, where applicable, of proceedings referred to in Book VI of the Commercial Code or equivalent proceedings under foreign law. They are applicable even in the event of liquidation of the organisation.
The regulations or articles of association of the undertaking may also provide for rules relating to the decisions of the management company. These rules and the resulting decisions are binding on unitholders, shareholders, holders of debt securities of all categories and creditors who have accepted them.
Subject to the third paragraph of IV of Article L. 214-190-1, the units or shares may not be redeemed by the fund.
III. - A financial undertaking may, under the conditions defined by decree of the Conseil d'Etat and those defined by its regulations or articles of association, grant or receive any type of guarantee or security.
The realisation or constitution of the guarantees or sureties granted in favour of the body entails the latter's right to acquire possession or ownership of the assets to which they relate.
IV. - Under the conditions defined by its regulations or articles of association and subject to the application of article L. 214-177 and article L. 214-183 respectively, the undertaking or, where applicable, its sub-funds may assign or transfer the receivables they acquire and the assets they hold and settle or liquidate contracts constituting forward financial instruments.
The assets and liabilities of a sub-fund may be sold or transferred to another sub-fund of the same undertaking in accordance with and pursuant to the first paragraph.
V. - 1° The acquisition or transfer of receivables by a financial institution is carried out solely by the delivery of a slip, the particulars and format of which are determined by decree, or by any other method of acquisition, assignment or transfer under French or foreign law.
Notwithstanding the previous paragraph, the assignment of receivables in the form of financial instruments is carried out in accordance with the specific rules applicable to the transfer of such instruments. Where applicable, the undertaking may subscribe directly to the issue of these instruments;
2° When carried out by means of the form referred to in 1°, the acquisition or assignment of the receivables takes effect between the parties and becomes enforceable against third parties on the date shown on the form when it is delivered, regardless of the date on which the receivables arose, fall due or are payable, without the need for any other formality, and regardless of the law applicable to the receivables and the law of the country of residence of the debtors;
3° Delivery of the slip automatically entails the transfer of the securities, guarantees and other accessories attached to each claim, including mortgage securities and professional claims assigned by way of guarantee or pledged under the conditions set out in articles L. 313-23 et seq, as well as the effectiveness of this transfer against third parties without the need for any other formality.
Notwithstanding any legislative or regulatory provision to the contrary, the finance institution may also, on a principal basis and under the conditions set out in articles L. 313-23 et seq, be the assignee of business receivables assigned by way of discount or guarantee, or the beneficiary of a pledge of such business receivables.
The finance institution automatically has the benefit of the acceptance deeds referred to in articles L. 313-29 and L. 313-29-1 relating to trade receivables acquired by the institution on a principal basis or assigned as collateral or pledged in its favour.
When the financing organisation acquires or holds a business debt as full ownership or as a guarantee, it may also ask debtors, including legal entities governed by public law, to undertake to pay it directly, by means of a written document, the details and form of which are set by decree, in the terms set out in Articles L. 313-29 and L. 313-29-1 and with the same effects;
4° The acquisition or assignment of receivables or the creation of any security or guarantee for the benefit of the financing organisation retains its effects notwithstanding the cessation of payments by the assignor or grantor at the time of such acquisition, assignment or creation and notwithstanding the possible opening of proceedings mentioned in Book VI of the French Commercial Code or equivalent proceedings under foreign law against the assignor subsequent to such acquisition, assignment or creation.
VI. - Where the debt assigned to the body arises from a rental contract with or without a purchase option or a leasing contract, neither the opening of a procedure mentioned in Book VI of the Commercial Code or an equivalent procedure based on foreign law against the lessor, nor the assignment or transfer of the movable or immovable property covered by the contract as part of or following such a procedure may call into question the continuation of the rental or leasing contract.
When the organisation has acquired or has undertaken to acquire a claim arising from the provision of funds to a legal entity under private or public law, or to a natural person in the exercise by the latter of his professional activity under a contract already entered into or to be entered into, the organisation and the assignor of the claim may, by express written agreement, agree that the organisation will be obliged to make the corresponding funds available to the debtor of the original or future claim and, if the debtor accepts this or is a party to the said agreement, that the assignor will no longer have any obligation in this respect towards the debtor from the date agreed between them. In this case, the maximum net liability of the organisation resulting from all these loan agreements must at no time exceed the value of its assets and, where applicable, the uncalled amount of subscriptions.
The assignment agreement may provide for a claim on all or part of any liquidation surplus of the undertaking or, where applicable, of a sub-fund of the undertaking, in favour of the assignor.
The provisions of article L. 632-2 of the French Commercial Code do not apply to payments received by a fund or to acts for valuable consideration carried out by or for the benefit of a fund, where such payments or acts are directly related to the transactions provided for in article L. 214-168.
