- Separation and regulation of banking activities
The Law amends certain provisions of the Book (livre) V of the Monetary and Financial Code ("MFC") in order to regulate the activities of credit institutions. In principle, under Article L.511-47 of the MFC, the following activities are now prohibited for credit institutions that must perform them through dedicated subsidiaries: (1) the trading on financial instruments involving their own account and (2) the transactions completed for their own account with leveraged mutual funds whose characteristics will be determined by Order of the Minister of Economy. The status of the subsidiaries which can carry out these activities is set by Article L.511-48 of the MFC.
The actual transfer of the activities of credit institutions to their dedicated subsidiaries shall occur on 1st July 2015 at the latest.
- Establishment of the bank resolution regime
The Law amends certain provisions of Book (livre) VI of the MFC to grant to the Prudential Control and Resolution Authority (the "PCRA") new powers relating to the prevention and resolution of banking crises and the preservation of banking stability. The PCRA may request the intervention of the funds of deposits guarantee and resolution during the implementation of the measures adopted pursuant to Article L.613-31-16 of the MFC.
The Law also provides clarification concerning preventive recovery plans and resolution proceedings, during which the PCRA may, for example, decide the automatic transfer of all or part of one or more branches of activity of the person subject to such proceedings.
The provisions relating to bank resolution came into force on 28 July 2013.