French Monetary and Financial Code
In forceI. - The deposit guarantee scheme shall be implemented at the request of the Autorité de contrôle prudentiel et de résolution as soon as the latter ascertains that a credit institution is no longer in a position to return, immediately or in the near future, the funds referred to in I of Article L. 312-4-1. The intervention of the Fonds de Garantie des Dépôts et de Résolution (Deposit Guarantee Fund) under the Deposit Guarantee Scheme shall result in the deregistration or withdrawal of authorisation of this institution and the cancellation of the members' or association's certificates referred to in Article L. 312-7 that it held; in this case, the sums corresponding to these certificates shall remain the property of the Fonds de Garantie des Dépôts et de Résolution. If necessary, the Autorité de contrôle prudentiel et de résolution will ask the European Central Bank to order the total withdrawal of authorisation.
The applicability of the deposit guarantee to the funds mentioned in article L. 312-4-1 is assessed on the date of the determination made pursuant to the first paragraph.
II. - As a preventive measure, on a proposal from the Autorité de contrôle prudentiel et de résolution, the deposit guarantee mechanism may also intervene with a credit institution whose situation gives rise to fears that the funds mentioned in I of Article L. 312-4-1 will eventually be unavailable, taking into account the support from which it may otherwise benefit. When the Fonds de Garantie des Dépôts et de Résolution agrees to intervene preventively with an institution, it shall define the conditions of this intervention, after obtaining the opinion of the Autorité de Contrôle Prudentiel et de Résolution. In particular, it may make the intervention conditional on the total or partial sale of the credit institution or the winding up of its business, in particular through the sale of its business.
The sums paid by the Fonds de Garantie des Dépôts et de Résolution as part of this preventive intervention may not exceed those that it would have paid if it had had to intervene with the institution concerned in application of I.
These sums, with the exception of those corresponding to equity securities or subordinated debt, benefit from the preferential right referred to in Article L. 611-11 of the French Commercial Code.
III. - The resolution college of the Autorité de contrôle prudentiel et de résolution may also refer to the fonds de garantie des dépôts et de résolution the situation of a credit institution, an investment firm mentioned in 2° of I of Article L. 613-34, a financial holding company, a mixed financial holding company and a finance company mentioned in II of Article L. 613-34 which is subject to one of the resolution measures provided for in sub-section 10 of section 4 of chapter III of title I of book VI.
The College may ask the Fonds de Garantie des Dépôts et de Résolution to intervene with the authorised person to take over or continue the activities sold or transferred.
It shall intervene in accordance with the procedures determined by the resolution college of the Autorité de contrôle prudentiel et de résolution.
In this respect, the Fonds de Garantie des Dépôts et de Résolution may participate in the implementation of an internal bail-out measure for the person referred to in the first paragraph, under the conditions and within the limits set out in Articles L. 613-55-1 and L. 613-55-5. The deposit guarantee and resolution fund may not be called upon under the deposit guarantee mechanism for an amount greater than the losses that this fund would have incurred if the person in question had been subject to compulsory liquidation under Book VI of the Commercial Code.
If the resolution in which the deposit guarantee and resolution fund participates concerns a group established in several Member States of the European Union, it intervenes in accordance with the provisions of sub-section 11 of section 4 of chapter III of title I of book VI.
Except where Articles L. 613-55-1 and L. 613-55-5 apply, the sums paid by the Fonds de Garantie des Dépôts et de Résolution, with the exception of those corresponding to equity securities or subordinated debt, constitute claims on the institution benefiting from the intervention ranking pari passu with the deposits it guarantees.
IV. - For the application of II and III, the Deposit Guarantee and Resolution Fund may:
1° Subscribe to an increase in capital, acquire all or part of the shares, equity securities, corporate units or other ownership securities of the person concerned ;
2° Subscribe to the capital or an increase in the capital of the bridge institution or asset management structure referred to respectively in Articles L. 613-13-53 or L. 613-54, acquire all or part of the shares, capital securities, corporate units or other ownership interests of these persons or provide them with any other contribution;
3° Guarantee all or part of the assets or liabilities of the person concerned, its subsidiaries, the bridge institution or the asset management structure;
4° Grant financing to the person concerned, its subsidiaries, the bridge institution or the asset management structure, in any form whatsoever, including in the form of a guarantee;
5° Acquire assets of the credit institution, investment firm or finance company concerned;
6° Participate, at the request of a central body mentioned in Article L. 511-30, in the action of the latter by bearing part of the cost of measures intended to guarantee the solvency of a credit institution affiliated to this central body or, in the event of a need established by the Autorité de contrôle prudentiel et de résolution, intervene at the request of the latter.
Where, after the implementation of any of the measures taken on the basis of Section 4 of Chapter III of Title I of Book VI, the assessment referred to in II of Article L. 613-57 shows that a creditor of the person concerned subject to a resolution procedure, or the Fonds de Garantie des Dépôts et de Résolution under the deposit guarantee scheme, has suffered losses greater than those it would have incurred if the person concerned had been subject to compulsory liquidation under Book VI of the Commercial Code, the compensation to which it is entitled shall be paid to it by the resolution funding scheme on the instructions of the resolution college of the Autorité de Contrôle Prudentiel et de Résolution.
The Fonds de Garantie des Dépôts et de Résolution may not be held liable for any loss suffered as a result of the assistance it has provided, except in the cases listed exhaustively in Article L. 650-1 of the French Commercial Code.
V. - Appeals of full jurisdiction against decisions of the Fonds de Garantie des Dépôts et de Résolution under the terms of this article are subject to administrative jurisdiction.
Any action against the fonds de garantie des dépôts et de résolution in connection with its intervention under this article shall be barred after two years from the event giving rise to such intervention. However, in the event of implementation of I of the present article, this period shall run from the day on which the person concerned became aware of the event in question if he proves that he was unaware of it until then.
The liability of the fonds de garantie des dépôts et de résolution under I shall only be incurred vis-à-vis depositors of branches of one of its members located in another country of the European Economic Area if the guarantee fund of the country in which the branch is located has acted in accordance with the instructions given by the fonds de garantie des dépôts et de résolution.
VI. - The second paragraph of Article L. 613-58-1 of this Code is applicable to decisions taken by the Fonds de Garantie des Dépôts et de Résolution under III and IV of this Article.
