French Monetary and Financial Code
In forceI. - Articles R. 214-32-18 to R. 214-32-21, article R. 214-32-27, I of article R. 214-32-28 and articles R. 214-32-29, R. 214-32-32 to R. 214-32-36, R. 214-32-38 to R. 214-32-42, R. 214-36, R. 214-39 and R. 214-43 do not apply to funds covered by this sub-paragraph.
However, professional private equity funds must comply with the following rules:
1° No more than 50% of the assets of a professional private equity fund may be invested in securities or rights of a single UCITS or FIA covered by paragraphs 1, 2 and 6 of sub-section 2, sub-paragraph 1 of paragraph 1 or paragraph 2 of sub-section 3 of this section, or of a single entity mentioned in 2° of II of Article L. 214-160 ;
2° The professional private equity fund may not hold more than 10% of the shares or units of a UCITS or an FIA covered by paragraphs 1, 2 and 6 of sub-section 2, sub-paragraph 1 of paragraph 1 or paragraph 2 of sub-section 3 of this section which is not covered by 2° of II of Article L. 214-160;
3° The claims referred to in the first paragraph of II of Article L. 214-160 comply with the following rules:
a) Ownership of the claim is based on a registration, an authentic instrument or a private deed whose evidential value is recognised by French law;
b) The debt is not subject to any security other than that which may have been created to achieve the management objective of the professional private equity fund;
c) The debt is subject to a reliable valuation in the form of an accurately calculated and regularly established price, which is a market price or a price provided by a valuation system making it possible to determine the value at which the asset could be exchanged between knowledgeable and willing parties in an arm's length transaction;
d) The liquidity of the debt enables the professional investment fund to meet its obligations with regard to the execution of redemptions vis-à-vis its unitholders and shareholders, as defined by its articles of association or regulations.
4° The digital assets mentioned in the third paragraph of II of Article L. 214-160 comply with the conditions defined in 1° to 4° of Article L. 214-154.
II. - Notwithstanding the first paragraph of I of article R. 214-44, progressive capital calls may be paid up after the end of the lock-up period.
Notwithstanding the first paragraph of III of article R. 214-44, the management company may distribute a portion of the fund's assets in cash at any time.
III. - The management company may enter into agreements with third parties relating to the management of the fund's holdings and involving contractual commitments other than delivery commitments, as well as agreements granting third parties any rights relating to the fund's assets and the uncalled amount of subscriptions, including personal or real guarantees, under the conditions defined in the fund rules.
The management company must provide unitholders with a list of these commitments, indicating their nature and estimated amount.
IV. - The limits set out in I must be complied with no later than two years after the fund is created.
