The French administrative order (arrêté) dated 5 December 2019 has provided amendments to the AMF General Regulation to provide specific provisions related to digital asset services providers, a new category of services providers set forth in the French PACTE Law with a national ambit (i.e., not relying on any EU provision and therefore not benefiting from passporting rights in the European Union).

This regulation details the conditions for licensing and registering digital asset services providers (which are, depending on the nature of the service) subject to mandatory or optional registration. This regulation further provides the organizational and good conduct rules related to such providers.

Such rules are notably inspired by the EU provisions related to markets in financial instruments (MiFID II rules) and relate to the following services on digital assets: safekeeping / custody of digital assets (generally through the custody of digital keys provided to the holder of such assets and giving an access to them); purchase or sale of digital assets against a legal tender; exchange of digital assets against other digital assets; management of a digital asset trading platform; reception and transmission of orders on digital assets; portfolio management of digital assets to the account of third parties; advice to digital assets purchasers; underwriting of digital assets; placement of digital assets (on a form commitment basis or without a firm commitment basis).

By operation of law, financial instruments cannot amount to digital assets. However, the French PACTE Law has not excluded that digital assets could be characterized as payment instruments (or entail payment services) within the meaning of PSDII or electronic money (e-money) as set forth in EMD II. Further guidance is expected on this matter, pending EU regulation notably on cryptoassets and cryptocurrencies.