French Investment Firms Permitted To Carry Out More Nonfinancial Activities

• Published date: 06 April 2021
• Subject Matter: Finance and Banking, Financial Services
• Law Firm: Jones Day
• Author: Mr Alban Caillemer du Ferrage, Philippe Goutay and Qian Hu

As a matter of principle, and similarly to credit institutions, investment firms in France are meant to carry out only those activities that are expressly provided for by statutes. In addition to investment services and listed ancillary services, the order of September 5, 2007, authorized investment firms to provide services that: (i) constitute the incidental use of resources primarily allocated to investment services activities (such as IT services or software); and (ii) were the extension of investment services without being ancillary investment services. Those activities commonly designated as "nonfinancial activities" could be carried out provided that the annual amount of all revenues from activities other than investment services and ancillary services did not exceed 20% of revenues from financial activities.

The order of December 23, 2020, clarifies the activities considered as the core business of an investment firm that may be carried out, as well as nonfinancial activities.

The core activities, set out in a new article 1, now include those activities that have emerged from MiFID2 (such as data reporting services and other activities) or services for which the firm may be authorized pursuant to financial regulations (such as clearing activities). This redrafting allows for a comprehensive list of activities that are core to financial activities.

The permitted "nonfinancial activities" are defined in articles 2 to 4:

• Article 2 remains unchanged and covers any type of agency...