French Monetary and Financial Code
In forceI. - The supervisory board shall examine the individual preventive recovery plans after consulting, where appropriate, the competent authorities of the Member States where branches of significant importance are located.
It shall ensure that they comply with the requirements of IV and VI of Article L. 613-35 and the regulatory provisions adopted for its application. In particular, it assesses their ability to maintain or restore the viability and financial situation of the persons concerned or the group to which they belong.
It verifies that the plans and the various measures provided for therein are likely to be implemented quickly and effectively in situations of financial crisis and to avoid, as far as possible, any significant negative impact on the financial system, including in scenarios that would lead other credit institutions or investment firms to implement preventive recovery plans during the same period.
In this review, it shall take into account the adequacy of the capital and funding structure of those submitting the plan in relation to the complexity of their organisational structure and risk profile.
II. - If the college of supervisors considers that a plan has significant shortcomings or that there are essential obstacles to its implementation, it will notify the person who submitted the plan or the parent undertaking of the group of its assessment and invite that person to submit, within a period of two months, extendable by one month, an amended plan to remedy these shortcomings and obstacles.
III. - If the supervisory board considers that a plan submitted to it at the end of this period still presents shortcomings, it may order the person concerned to make specific amendments to the plan.
IV. - If there are no changes to the plan which would effectively remedy the shortcomings and obstacles identified in its assessment, the college of supervisors shall require the person concerned to submit to it, within a period which it shall determine, the changes which it can make to its activities.
V. - Where no changes referred to in IV are submitted within the time limit set, or where such changes are considered insufficient, the supervisory board may require the person concerned to take any measures it considers necessary.
To this end, and without prejudice to the application of Articles L. 511-41-3, L. 511-41-5, L. 612-24 and L. 612-32 to L. 612-34-1, the supervisory board may, in a reasoned decision, order the person concerned to:
1° Reduce its risk profile, including liquidity risk ;
2° Take any measure enabling rapid recapitalisation measures to be taken;
3° Review its strategy and structure;
4° Modify its financing strategy in order to increase its ability to restore core activities and critical functions;
5° Modify its governance structure.
VI. - The decisions provided for in II to V are taken following an adversarial procedure.
