Subsection 1: Approval

I. - Before commencing business, credit institutions must obtain authorisation. This authorisation is granted to legal entities with their registered office in France or to branches established on French territory of credit institutions with their registered office in a State that is neither a member of the European Union nor a party to the Agreement on the European Economic Area.

Pursuant to Articles 4 and 14 of Council Regulation (EU) No 1024/2013 of 15 October 2013, credit institution authorisation is granted by the European Central Bank, on a proposal from the Autorité de contrôle prudentiel et de résolution.

However, in the case of the branches referred to in the first paragraph, authorisation is granted by the Autorité de contrôle prudentiel et de résolution. These branches are authorised as banks or specialised credit institutions other than sociétés de crédit foncier or sociétés de financement de l'habitat, within the limits of the transactions that the credit institutions to which they belong are authorised to carry out.

Unless otherwise stipulated, where the word "person" in this Code refers to a credit institution, it also refers to a branch mentioned in the first paragraph.

Ia - Firms referred to in Article 4(1)(1)(b) of Regulation (EU) No 575/2013 that have already obtained authorisation as investment firms shall submit an application for authorisation in accordance with this Article no later than the day on which one of the following events occurs:

1° The average total monthly assets, calculated over a period of twelve consecutive months, reach or exceed 30 billion euros ;

2° The average total monthly assets, calculated over a period of twelve consecutive months, are less than 30 billion euros and the company is part of a group in which the total value of the consolidated assets of all the companies in the group, which each individually have total assets of less than 30 billion euros and which carry out any of the activities mentioned in 3, 6-1 and 6-2 of article L. 321-1, reaches or exceeds 30 billion euros, both calculated as an average over a period of twelve consecutive months.

The firms referred to in Article 4(1)(1)(b) of the same Regulation may continue to carry on the activities for which they are authorised as investment firms until they obtain the authorisation referred to in this Article.

II. - Before commencing business, finance companies must obtain authorisation issued by the Autorité de contrôle prudentiel et de résolution pursuant to 1° of II of article L. 612-1.

III. - The Autorité de contrôle prudentiel et de résolution shall verify whether the undertaking meets the obligations set out in Articles L. 511-11, L. 511-13, L. 515-1-1 or 93 of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 and whether the legal form of the undertaking is appropriate for the activity of credit institution or finance company, as the case may be.

It shall take into account the following elements:

1° The programme of activities of this undertaking, which indicates the existence of parent undertakings, financial holding companies and mixed financial holding companies where the undertaking is part of a group within the meaning of Article L. 511-20 ;

2° Its organisation, systems, procedures, policies and practices referred to in Article L. 511-55;

3° its remuneration policy and practice, which must be based on the principle of equal remuneration, in accordance with the provisions of article L. 511-71 ;

4° The technical and financial resources it plans to implement;

5° The identity of the capital contributors and the amount of their participation, in accordance with the conditions defined by order of the Minister for the Economy;

6° The appropriateness of the capital providers in the light of the assessment criteria set out in I of Article L. 511-12-1.

The AMF also assesses the applicant company's ability to achieve its development objectives under conditions that are compatible with the smooth operation of the banking system and that provide customers with satisfactory security.

When setting the conditions for authorisation, the Autorité de contrôle prudentiel et de résolution may take into account the specific nature of certain credit institutions or finance companies belonging to the social economy sector. In particular, it assesses the value of their action in terms of public interest missions relating to the fight against exclusion or the effective recognition of a right to credit.

The AMF may, depending on the case, limit or propose to the European Central Bank that authorisation be limited to the performance of certain operations defined by the applicant's corporate purpose.

The AMF may, depending on the case, impose or propose to the European Central Bank that the authorisation be granted subject to special conditions designed to preserve the balance of the undertaking's financial structure and the smooth operation of the banking system, taking into account, where applicable, the objectives of the supplementary supervision provided for in Chapter VII of Title I of Book V of this Code. It may also make or propose to the European Central Bank that the granting of authorisation be subject to compliance with commitments entered into by the applicant undertaking.

The Autorité de contrôle prudentiel et de résolution shall not grant authorisation to a branch referred to in I unless the credit institution to which the branch belongs undertakes to exercise, in respect of that branch, duties equivalent to those conferred by section 8 of this chapter on the board of directors, the supervisory board or any other body exercising equivalent supervisory functions, and on the general meeting.

IV. - The AMF shall refuse authorisation if the exercise of the supervisory functions of the applicant undertaking is likely to be hindered either by the existence of direct or indirect capital or control links between the undertaking and other natural or legal persons, or by the existence of laws or regulations of a State which is not a party to the Agreement on the European Economic Area and to which one or more of these persons belong.

The AMF shall refuse authorisation if the provisions of articles L. 511-51 and L. 511-52 are not complied with.

The AMF shall refuse authorisation if, in the light of the assessment criteria set out in Article L. 511-12-1(I), there are reasonable grounds for believing that the appropriateness of the capital providers is such that sound and prudent management cannot be guaranteed, or if the information provided is incomplete.

The AMF shall refuse authorisation if the applicant undertaking does not have all the systems, procedures, policies and practices referred to in Article L. 511-55 and a remuneration policy and practice that must be based on the principle of equal remuneration in accordance with the provisions of Article L. 511-71.

V. - The credit institution or finance company must at all times satisfy the conditions of its authorisation.