French Monetary and Financial Code
In forceI. - The members mentioned in 1° and 2° of I of Article L. 612-8-1 or the European Central Bank may refer the situation of a person mentioned in I of Article L. 613-34 to the resolution college of the Autorité de contrôle prudentiel et de résolution with a view to implementing one or more resolution measures. However, in the case provided for in 3° of II of Article L. 613-48, only the member of the resolution college mentioned in 2° of I of Article L. 612-8-1 may refer the matter to the resolution college.
The persons exercising effective management within the meaning of Article L. 511-13 or 4 of Article L. 532-2, the board of directors, the supervisory board or any other body exercising equivalent supervisory functions shall refer the matter to the resolution board without delay if they consider that the failure of the person mentioned in the first paragraph is proven or foreseeable within the meaning of II of Article L. 613-48. The supervisory board shall inform the resolution board and inform it of the measures taken with regard to this person in application of Articles L. 511-41-3, L. 511-41-5, L. 612-32, L. 612-33, L. 612-34, L. 612-34-1 and L. 613-36 and sub-section 4 of this section.
II. - Where a matter is referred to it pursuant to I, the resolution board of the Autorité de contrôle prudentiel et de résolution may only take the resolution measures referred to in I if the following conditions are met:
1° The supervisory board, after obtaining the opinion of the resolution board, or the resolution board, after obtaining the opinion of the supervisory board, has established that the failure of a person referred to in I of Article L. 613-34 is proven or foreseeable pursuant to II of Article L. 613-48 ;
2° There is no reasonable prospect that this failure can be avoided within a reasonable timeframe other than by implementing a resolution measure;
3° A resolution measure is necessary in view of the resolution objectives mentioned in I of Article L. 613-50 and a compulsory liquidation procedure instituted by Book VI of the French Commercial Code would not enable these objectives to be achieved to the same extent.
III. - When the resolution college or the supervisory board finds that the conditions mentioned in 1° and 2° of II have been met, as well as in cases where the resolution college implements a resolution measure at the request of the Single Resolution Board, it shall immediately inform :
1° The Minister responsible for the economy ;
2° The European Systemic Risk Board ;
3° The High Council for Financial Stability;
4° The college of resolution or the college of supervision, as the case may be;
5° The competent authorities, within the meaning of Articles L. 511-21 and L. 532-16, of the Member States of the European Union in which the person referred to in the first paragraph of I has established a branch, and the resolution authorities of these States;
6° Where the person referred to in the first paragraph of I is subject to supervision on a consolidated basis pursuant to the provisions of Subsection 2 of Section 1 of Chapter III of this Title, the authority of another Member State of the European Union responsible for supervision on a consolidated basis, as well as the resolution authority of that State;
7° The Fonds de Garantie des Dépôts et de Résolution (Deposit Guarantee and Resolution Fund) where this is necessary for it to fulfil its duties.
IV - In cases where the matter is referred to it pursuant to I and where it finds that the conditions for triggering a resolution procedure mentioned in II have not been met, the resolution college will notify the supervisory college, which will assess whether it is appropriate to take the precautionary measures mentioned in Article L. 612-33.
The supervisory board shall also assess whether to request the opening of compulsory liquidation proceedings pursuant to the first paragraph of Article L. 613-27.
