French Monetary and Financial Code
In forceI. - The determination that a person referred to in I of Article L. 613-34 or a group is in the situation referred to in 3° of I of Article L. 613-48-1 shall be made by the collège de résolution with the assent of the collège de supervision and, where applicable, jointly with the appropriate authorities in the form of a joint decision where:
1° The supervisory college is the authority responsible for the supervision on a consolidated basis of the group to which the subsidiary belongs ;
2° The person referred to in I of Article L. 613-34 is established in France and is part of a group which is supervised on a consolidated basis by the competent authority of another Member State or by the European Central Bank.
For the purposes of the first paragraph, the appropriate authority is the authority responsible, either under the legislation of another Member State or pursuant to Council Regulation (EU) No 1024/2013 of 15 October 2013, for determining that a person referred to in I of Article L. 613-34 or a group within the meaning of III of Article L. 511-20 is in the situation described in 3° of I of Article L. 613-48-1.
II. - In the case of a credit institution, an investment firm or a group within the meaning of III of Article L. 511-20 having a transnational activity, when the resolution college finds that one or more of the conditions mentioned in 3°, 4° and 5° of I of Article L. 613-48-1 are met, it shall take into consideration the potential impact of the resolution in all Member States in which the credit institution, investment firm or group is active.
III. - When it is about to make a determination that one or more of the conditions mentioned in 2° to 5° of I of Article L. 613-48-1 are met in respect of a subsidiary that issues own funds instruments mentioned in I of Article L. 613-48 and recognised for the purposes of compliance with capital requirements on an individual and consolidated basis, or eligible commitments mentioned in VII of Article L. 613-48 and recognised for the purposes of compliance with capital requirements on an individual and consolidated basis, or eligible commitments mentioned in VII of Article L. 613-48 and recognised for the purposes of compliance with capital requirements on an individual and consolidated basis, it shall take into account the potential impact of the resolution in all Member States in which the credit institution, investment firm or group is active. 613-48 and recognised for the purposes of compliance with the requirements referred to in IV of Article L. 613-44, the resolution college shall notify its intention within 24 hours, as the case may be, to the supervisory college or the competent authority on a consolidated basis and, if different, the appropriate authority of the Member State where the competent authority on a consolidated basis is established.
When it is about to make a determination that a group, which it supervises on a consolidated basis, is in the situation referred to in 3° of I of Article L. 613-48-1, the resolution college shall also notify without delay its intention to the competent authority responsible for each entity having issued own funds instruments whose nominal value could be reduced or which could be converted if such determination is effectively made and, if it is a different authority, to the appropriate authorities of the Member State where the said competent authorities are established.
IV. - Reasons must be given for the notification referred to in III.
V. - When a notification is made pursuant to III, the collège de résolution, after obtaining the opinion of the appropriate authorities, shall determine :
1° Whether there is an alternative measure that can be implemented instead of the reduction in nominal value or conversion mentioned in I of Article L. 613-48 ;
2° If so, whether this alternative measure can be applied in practice and whether there is a realistic prospect that it will be able to remedy, within an appropriate timeframe, the situations referred to in 2°, 3°, 4° and 5° of I of Article L. 613-48-1.
VI. - For the purposes of 1° of V, an alternative measure may be :
1° Any early intervention measure referred to in Article L. 511-41-5 ;
2° Any measure referred to in Article L. 511-41-3 or any equivalent measure in another Member State;
3° A transfer of funds or capital from the parent undertaking.
VII. - Where it considers that the alternative measures referred to in VI exist, the resolution college, after obtaining the opinion of the authorities informed in accordance with III, shall ensure that they are implemented.
VIII. - When it considers, after consulting the appropriate authorities referred to in the first paragraph of III, that no alternative measure would enable the objective referred to in 2° of V to be achieved, the resolution board shall re-examine the statement that it was planning to make.
IX. - When it decides that a group meets the conditions of 3° of I of Article L. 613-48-1, the resolution college shall immediately notify the appropriate authorities of the Member States where the affected subsidiaries are established. This notification must take the form of a joint decision referred to in II of Article L. 613-60-2. In the absence of such a joint decision, the determination shall not be made.
X. - When a matter is referred to the collège de résolution in its capacity as resolution authority of a person referred to in I of Article L. 613-34 that is a subsidiary of a group, the collège de résolution shall, where necessary, cooperate fully with the appropriate authority responsible for determining whether an alternative measure meets the conditions set out in VI.
It shall endeavour to reach a joint decision when the matter is referred to it by the appropriate authority of another Member State or the European Central Bank.
XI. - A decision to reduce the nominal value or to convert own funds pursuant to the foregoing provisions shall be implemented without delay, taking into account the urgency of the situation which gave rise to it.
