Subsection 5: Penalties

I. - The Board shall examine the investigation or inspection report drawn up by the departments of the Autorité des marchés financiers or the request made by the Chairman of the Autorité de contrôle prudentiel et de résolution.

Subject to Article L. 465-3-6, if it decides to initiate sanction proceedings, it notifies the persons concerned of the objections. It forwards the statement of objections to the Enforcement Committee, which appoints a rapporteur from among its members. Facts dating back more than six years may not be referred to the Enforcement Committee if, during this period, no action has been taken to investigate, establish or sanction them. The starting point of the limitation period is the day on which the breach was committed or, if the breach is concealed or hidden, the day on which the breach came to light and was ascertained under conditions allowing the AMF to carry out its investigative or supervisory duties. In the latter case, the limitation period may not exceed twelve completed years.

A member of the Board is invited to attend the hearing. He attends without the right to vote. They may be assisted or represented by AMF staff. The member may submit observations in support of the complaints and propose a sanction.

The Enforcement Committee may hear any AMF official.

In urgent cases, the Board may suspend the activities of the persons referred to in a and b of II above against whom sanction proceedings have been initiated.

If the Board forwards the report referred to in the first paragraph to the Public Prosecutor, the Board may decide to make the forwarding public.

II. - The Enforcement Committee may, after an adversarial procedure, impose a sanction on the following persons:

a) The persons referred to in 1° to 8° and 10° bis to 22° of II of Article L. 621-9, for any breach of their professional obligations as defined by the European regulations, laws, regulations and professional rules approved by the Autorité des marchés financiers in force, subject to the provisions of Articles L. 612-39 and L. 612-40 ;

b) Natural persons placed under the authority of or acting on behalf of one of the persons mentioned in 1° to 8° and 10° bis to 22° of II of Article L. 621-9 in respect of any breach of their professional obligations defined by European regulations, laws, regulations and professional rules approved by the Autorité des marchés financiers in force, subject to the provisions of Articles L. 612-39 and L. 612-40 ;

c) Any person who, on French territory or abroad:

1° Has engaged in or attempted to engage in insider dealing or market manipulation, within the meaning of Articles 8 or 12 of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (Market Abuse Regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC ;

2° Has recommended that another person carry out insider trading, within the meaning of Article 8 of the same Regulation, or has induced another person to carry out such trading;

3° Has engaged in unlawful disclosure of inside information, within the meaning of Article 10 of the said Regulation;

4° Or has committed any other breach mentioned in the first paragraph of II of Article L. 621-14,

where these acts concern :

- a financial instrument or unit referred to in Article L. 229-7 of the Environmental Code, traded on a trading venue located on French territory or for which an application for admission to trading on such a trading venue has been submitted ;

- a financial instrument or a unit referred to in the same Article L. 229-7 other than those referred to in the seventh paragraph of this c, the price or value of which depends on the price or value of a financial instrument or a unit referred to in the same seventh paragraph or the price or value of which has an effect on the price or value of a financial instrument or a unit referred to in the said seventh paragraph;

- a spot commodities contract within the meaning of 1° of II of Article L. 465-3-4 of this Code where the transaction, behaviour or dissemination is of such a nature or is intended to have an effect on the price of a financial instrument or a unit referred to in the seventh or eighth paragraphs of this c ;

- an index referred to in Article L. 465-3-3 ;

d) Any person who, on French territory:

1° Has engaged in or attempted to engage in insider dealing or market manipulation, within the meaning of Articles 8 or 12 of the aforementioned Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014;

2° Has recommended that another person carry out insider trading, within the meaning of Article 8 of the same Regulation, or has induced another person to carry out such trading ;

3° Has engaged in unlawful disclosure of inside information, within the meaning of Article 10 of the said Regulation;

4° Or has committed any other breach mentioned in the first paragraph of II of Article L. 621-14,

where these acts concern :

- a financial instrument or a unit referred to in Article L. 229-7 of the Environmental Code, traded on a trading venue in another Member State of the European Union or party to the European Economic Area, or for which an application for admission to trading on such a trading venue has been submitted ;

- a financial instrument or a unit referred to in the same Article L. 229-7 other than those referred to in the seventh paragraph of this d, the price or value of which depends on the price or value of a financial instrument or a unit referred to in the same seventh paragraph or the price or value of which has an effect on the price or value of a financial instrument or a unit referred to in the said seventh paragraph;

- a spot commodities contract within the meaning of 1° of II of Article L. 465-3-4 of this Code where the transaction, behaviour or dissemination is of such a nature or is intended to have an effect on the price of a financial instrument or a unit mentioned in the seventh or eighth paragraphs of this d ;

- a financial instrument or a unit referred to in Article L. 229-7 of the Environment Code, the price or value of which has an effect on the price or value of a spot commodity contract referred to in 2° of II of Article L. 465-3-4 of this Code, where the transaction, behaviour or dissemination has or is likely to have an effect on the price or value of a spot commodity contract;

- an index referred to in Article L. 465-3-3 ;

e) Any person who, on French territory or abroad, has disseminated or attempted to disseminate false information or has committed any other breach mentioned in the first paragraph of II of Article L. 621-14, in connection with :

- a public offer of financial securities as defined in Article L. 411-1 ;

- or an offer of tokens for which the issuer has applied for approval under Article L. 552-4 ;

f) Any person who, in the context of an investigation or an inspection carried out pursuant to I of Article L. 621-9, at the request of the investigators or inspectors and subject to the preservation of a legally protected secret enforceable against the AMF, refuses to provide access to a document, regardless of the medium, and to supply a copy thereof, refuses to communicate information or to respond to a summons, or refuses to provide access to business premises;

g) Any other person in respect of breaches of obligations under European regulations falling within the jurisdiction of the Autorité des marchés financiers;

h) Any person who, in France or abroad, has failed to comply with the obligations relating to public offers of shares referred to in the fourth paragraph of Article L. 512-1 orArticle 11 of Law no. 47-1775 of 10 September 1947 on the status of cooperatives or public offers of mutualist certificates referred to in the first paragraph of II of Article L. 322-26-8 of the Insurance Code, provided that these public offers are not offers referred to in 1° of Article L. 411-2 or in 2 or 3 of Article L. 411-2-1 ;

i) Any person who, on French territory or abroad, does not comply with the rules relating to position limits and declarations of positions mentioned in Articles L. 420-11 to L. 420-16;

j) Any person who, on French territory or abroad, breaches the obligations imposed on him when he uses algorithmic trading as defined in Article L. 533-10-3.

III. - The penalties applicable are :

a) For the persons mentioned in 1° to 8°, 10° bis, 11°, 12°, 15° to 19°, 21° and 22° of II of Article L. 621-9, a warning, a reprimand, a temporary or permanent ban on exercising all or some of the services provided, removal from the register mentioned in Article L. 546-1 ; the Enforcement Committee may impose a financial penalty instead of or in addition to these penalties, the amount of which may not exceed 100 million euros or ten times the amount of the benefit derived from the breach if this can be determined; the sums are paid to the guarantee fund to which the person penalised is affiliated or, failing this, to the Treasury ;

b) For natural persons placed under the authority or acting on behalf of one of the persons mentioned in 1° to 8°, 10° bis, 11°, 12° and 15° to 22° of II of Article L. 621-9, or exercising managerial functions, within the meaning of Article L. 533-25, within one of these persons, a warning, a reprimand, the temporary or permanent withdrawal of the professional licence, a temporary ban on trading on their own account, a temporary or permanent ban on carrying out all or part of the activities or management functions within a person mentioned in 1° to 8°, 10° bis, 11°, 12° and 15° to 22° of II of Article L. 621-9. In the case of the practices referred to in II of this article, the Enforcement Committee may impose a financial penalty instead of or in addition to these penalties, the amount of which may not exceed 15 million euros or ten times the amount of the benefit derived from the breach if this amount can be determined. The sums are paid to the guarantee fund to which the legal entity under whose authority or on whose behalf the person penalised is acting is affiliated or, failing that, to the Treasury;

c) For persons other than one of the persons referred to in II of Article L. 621-9, who commit the acts referred to in c to h of II of this Article, a fine of no more than 100 million euros or ten times the amount of the benefit derived from the breach if this can be determined; the sums shall be paid to the Treasury; d) For persons referred to in c) to h) of II of this Article, a fine of no more than 100 million euros or ten times the amount of the benefit derived from the breach if this can be determined; the sums shall be paid to the Treasury;

d) For the persons mentioned in 4 and 5 of Article 29 of Regulation (EU) 2017/2402 of the European Parliament and of the Council of 12 December 2017 creating a general framework for securitisation and a specific framework for simple, transparent and standardised securitisations and amending Directives 2009/65/ EC, 2009/138/ EC and 2011/61/ EU and Regulations (EC) No 1060/2009 and (EU) No 648/2012, the penalties provided for in points c to h of 2 of Article 32 of the same Regulation.

Financial penalties imposed pursuant to this III may be subject to a surcharge of up to 10% of their amount, payable by the person penalised and intended to finance victim support.

The guarantee fund referred to in a and b may, under conditions set by its internal regulations and up to a limit of 300,000 euros per year, allocate part of the proceeds of financial penalties imposed by the Enforcement Committee that it collects to educational initiatives in the financial field.

IIIa. - The amount of the financial penalty referred to in a and c of III may be increased to 15% of the total annual turnover of the person sanctioned in the event of a breach of the obligations :

1° Set by Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (Market Abuse Regulation) and repealing Directive 2003/6/ EC of the European Parliament and of the Council and Commission Directives 2013/124/ EC, 2013/125/ EC and 2004/72/ EC ;

2° Fixed by Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories, and amending Directives 98/26/ EC and 2014/65/ EU and Regulation (EU) No 236/2012 ;

3° Set by Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products ;

4° Set by Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012 ;

5° Defined by European regulations and by this Code or the General Regulation of the Autorité des marchés financiers, committed by the management companies and depositaries mentioned in 7°, 7° bis and 12° of II of Article L. 621-9, relating to collective investment schemes mentioned in 1° of I of Article L. 214-1 ;

5° bis Defined by European regulations and by this Code or the General Regulation of the Autorité des marchés financiers in the context of a public offer of financial securities or an admission to trading on a regulated market for financial securities;

6° Provided for in Article L. 233-7 and II ofArticle L. 233-8 of the Commercial Code and Article L. 451-1-2 of this Code;

7° Set by Regulation (EU) 2019/1238 of the European Parliament and of the Council of 20 June 2019 on a pan-European individual retirement savings product (PEPP).

The total annual turnover referred to in the first paragraph of this IIIa is assessed as shown in the latest available accounts approved by the General Meeting. Where the legal entity is a company or a subsidiary of a company required to draw up consolidated accounts pursuant to article L. 233-16 of the Commercial Code, the total annual turnover to be taken into consideration is the total annual turnover as shown in the latest consolidated annual accounts approved by the General Meeting.

III ter. - In applying the penalties referred to in III and IIIa, particular account shall be taken of :

- the seriousness and duration of the breach ;

- the quality and degree of involvement of the person in question ;

- the financial situation and capacity of the person in question, having regard in particular to his assets and, in the case of a natural person, his annual income, and in the case of a legal person, his total turnover ;

- the importance of either the gains or advantages obtained, or the losses or costs avoided by the person in question, insofar as they can be determined;

- the losses suffered by third parties as a result of the breach, insofar as these can be determined;

- the extent to which the person concerned has cooperated with the Autorité des marchés financiers, without prejudice to the need to ensure the return of the benefit received by that person;

- previous breaches committed by the person concerned;

- any circumstances specific to the person in question, in particular the measures taken by that person to remedy the malfunctions observed, caused by the breach for which it is responsible and, where applicable, to repair the damage caused to third parties, as well as to avoid any repetition of the breach.

IIIc. - In accordance with the conditions laid down by decree of the Conseil d'Etat, a member of the Enforcement Committee may be disqualified at the request of the accused party if there is a serious reason to doubt the impartiality of that member.

IV. - The Enforcement Committee makes a reasoned decision in the absence of the rapporteur. No sanction may be imposed without the person concerned or his representative having been heard or, failing this, duly summoned.

IVa. - Sanction Committee meetings are public.

However, on his own initiative or at the request of a respondent, the chairman of the panel hearing the case may prohibit the public from entering the room during all or part of the hearing in the interests of public order, national security or when the protection of business secrets or any other secret protected by law so requires.

V. - The Enforcement Committee's decision is published in the publications, newspapers or media it designates, in a format commensurate with the misconduct committed and the sanction imposed. The costs are borne by the persons sanctioned.

The Enforcement Committee may decide to postpone publication of a decision, to publish it anonymously or not to publish it in any of the following circumstances:

a) Where publication of the decision is likely to cause serious and disproportionate harm to the person concerned, in particular, in the case of a sanction imposed on a natural person, where publication includes personal data ;

b) When publication would be likely to seriously disrupt the stability of the financial system, as well as the conduct of an investigation or an audit in progress.

Decisions relating to breaches by any person of the obligations laid down in Article L. 233-7 and II of Article L. 233-8 of the Commercial Code and Article L. 451-1-2 of this Code must be published.

When a sanction decision taken by the Enforcement Committee is appealed, the AMF shall immediately publish this information on its website, along with any subsequent information on the outcome of the appeal. Any decision reversing a previous decision imposing a sanction or measure shall be published.

Any decision published on the AMF website shall remain available for at least five years from the date of publication. The personal data contained in the decision published on the AMF website may not be kept for more than five years.

VI. - Persons sanctioned by a permanent ban on exercising all or part of the activities or services provided or by the permanent withdrawal of their professional licence may, at their request, be relieved of this sanction after the expiry of a period of at least ten years, in accordance with the conditions and procedures determined by a decree of the Conseil d'Etat.