French Monetary and Financial Code
In forceI. - In accordance with the conditions laid down by decree of the Conseil d'Etat, the assets of an undertaking for collective real estate investment are exclusively made up of :
1° Buildings constructed or acquired with a view to rental, as well as furnishings, equipment or movable property allocated to these buildings and necessary for the operation, use or exploitation of the latter by a third party, rights in rem relating to such property and listed by the decree of the Conseil d'Etat referred to in the previous paragraph and rights held in the capacity of lessee relating to leasing contracts relating to such property;
2° Units in partnerships which are not admitted to trading on a market referred to in articles L. 421-1, L. 422-1 and L. 423-1 and which satisfy the following conditions:
a) The members are liable for liabilities in excess of their contributions, except in cases where, pursuant to article L. 214-89 or an equivalent provision of foreign law, they are liable for liabilities only up to the amount of their contributions;
b) The assets consist mainly of buildings acquired or constructed with a view to rental, as well as furnishings, equipment or movable property allocated to these buildings and necessary for the operation, use or exploitation of the latter by a third party, rights in rem relating to such property, rights held in the capacity of lessee relating to financial leases on buildings with a view to their rental, or direct or indirect shareholdings in companies meeting the conditions of this 2° ;
c) The other assets are current account advances granted to companies referred to in 2° and 3°, receivables arising from their main business, cash referred to in 9° or liquid financial instruments referred to in 8°;
d) The financial instruments they issue are not admitted to trading on a market mentioned in articles L. 421-1, L. 422-1 and L. 423-1 ;
3° Units in partnerships other than those mentioned in 2°, units or shares in companies other than partnerships which are not admitted to trading on a market mentioned in articles L. 421-1, L. 422-1 and L. 423-1. These companies meet the following conditions
a) The liability of the members or shareholders is limited to the amount of their contributions;
b) Their assets consist mainly of buildings acquired or constructed with a view to rental, as well as furnishings, equipment or movable property allocated to these buildings and necessary for the operation, use or exploitation of the latter by a third party, or rights in rem relating to such property, rights held in the capacity of lessee under leasing contracts relating to buildings with a view to letting them or direct or indirect holdings in companies meeting the conditions set out in a, b and d of 2° or this 3° or current account advances granted to companies mentioned in 2° or this 3° ;
c) The financial instruments they issue are not admitted to trading on a market mentioned in articles L. 421-1, L. 422-1 and L. 423-1 ;
4° Shares traded on a market referred to in articles L. 421-1, L. 422-1 and L. 423-1 and issued by a company whose assets consist mainly of buildings acquired or constructed with a view to letting, rights in rem relating to such property, rights held as lessee under leasing contracts relating to buildings with a view to letting, or direct or indirect holdings in companies whose assets meet the same conditions;
5° Units or shares in real estate investment schemes and professional real estate investment schemes and units, shares or rights held in bodies governed by foreign law with an equivalent object, whatever their form;
6° Financial securities referred to in II of article L. 211-1 and article L. 211-41 admitted to trading on a market referred to in articles L. 421-1, L. 422-1 and L. 423-1 as well as financial futures instruments under the conditions set out in article L. 214-38 ;
7° Units or shares in undertakings for collective investment in transferable securities covered by section 1 of this chapter or FIAs covered by article L. 214-24-24 or authorised for marketing in France;
8° Deposits and liquid financial instruments defined by decree in the Conseil d'Etat ;
9° Liquid assets defined by decree of the Conseil d'Etat;
10° Current account advances granted pursuant to article L. 214-42.
A decree of the Conseil d'Etat defines the rules for spreading and capping risks, particularly in terms of construction, applicable to the real estate investment trust.
II. - An undertaking for collective real estate investment and the companies mentioned in 2° of I may not hold shares, units, financial rights or voting rights in an entity, regardless of its form, whose partners or members are indefinitely and jointly and severally liable for the entity's debts.
