The Autorité des Marchés Financiers (the French financial markets regulator, the “AMF”) has published on 1 April 2016 the results from the public consultation organized at the end of last year with respect to direct fund lending in France, following the entry into force of the ELTIF Regulations. In these results, the AMF contemplates authorizing a limited number of French funds (i.e., specialised professional funds (fonds professionnels spécialisés), securitisation vehicles (organismes de titrisation) and professional private equity funds (fonds professionnels de capital investissement)) to make direct loans to borrowers, provided that certain criteria be met. Such criteria include, among others: constraints on fund leverage (30%, not for the purposes of making loans), no loans to financial companies, loans should be limited in duration by the funds’ term and the selling of loans should be limited. Furthermore, the management companies managing such funds shall have a specific programme of operations allowing for the possibility to grant loans. The French government will publish in the coming weeks a decree detailing the requirements to be met by such funds in France for direct lending.
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Direct Lending by French Funds
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