The International Capital Markets Review: France

Introduction

The legislation governing French capital markets is designed to promote a flexible framework for issuing or trading capital market products while providing a high degree of legal certainty and a strong supervisory framework.

i Legislative framework

Over the past 20 years, French capital market legislation has evolved from a national set of rules to a modernised legal framework integrating EU initiatives and the development of global capital markets.

Most EU directives and regulations related to capital market transactions (e.g., the Money Market Fund Regulation, the Benchmark Regulation, the Securities Financing Transactions Regulation, the Securitisation Regulation, the Packaged Retail and Insurance-Based Investment Products Regulation, the Prospectus Regulation, the Market Abuse Directive and the Market Abuse Regulation, the Alternative Investment Fund Managers Directive (AIFMD) and others) have been implemented under French law, in addition to the Markets in Financial Instruments Directive (MiFID II), which came into effect on 3 January 2018, and the Regulation on over-the-counter (OTC) derivatives, central counterparties (CCPs) and trade repositories.

The stock exchange is of course a key element of the French capital market infrastructure. Stock exchanges in France are operated by Euronext.

ii Law governing the issuance of debt and equity securities

The general legal framework for securities offerings and the sale of securities traded on a stock market is enshrined in the Monetary and Financial Code (M&FC), the General Regulations of the French Financial Markets Authority (RG-AMF) and related implementing instructions. European regulations, and in particular the Prospectus Regulation (recently amended), are also part of the French legal corpus regarding capital market transactions since they apply directly in France.

When securities are issued and distributed on a cross-border basis, several laws may be applicable: the issuer's own law applies to certain matters, while other laws may be applicable to the terms and conditions of the relevant securities or to the distribution and placement of the securities. If the securities are listed, the relevant stock market law may also be applicable.

A French court would apply the securities issuer's own law, lex societatis, to the rights of the holders of equity securities. Matters concerning capacity and applicable authorities would also be governed by lex societatis in respect of debt securities. Therefore, the issuance of equity and debt securities by a French company would in this respect be governed by French law, and in particular by the French Commercial Code, the M&FC and the RG-AMF.

Contractual terms of bonds are subject to party autonomy, and if a transaction is international or cross-border, bonds may be governed by a foreign law chosen by the parties, subject to any provisions that may be mandatory from a French public policy perspective.

Prospectus requirements apply to public offerings. Pursuant to Article 42 of Delegated Regulation 2019/980 of the European Commission dated 14 March 2019, before conducting a public offer of securities or seeking admission of securities to trading on a regulated market within the European Economic Area (EEA) and by extension in France, persons or entities making a public offer of securities in France need to prepare a draft prospectus and submit it for approval to the Financial Markets Authority (AMF) or the competent supervisory authority of another Member State of the European Community or a state party to the EEA agreement.

Where the AMF is not the competent authority to approve a prospectus, the supervisory authority that approved the prospectus will send the certificate of approval and a copy of the prospectus to the AMF, with a French translation of the summary note, where appropriate. Dispatch of that certificate to the AMF will be made at the request of the persons or entities seeking to offer securities to the public or to have securities admitted to trading on a regulated market in France.

A French issuer seeking admission of securities outside the EEA, however, would not be required to obtain approval from the AMF or from the competent supervisory authority of another EEA Member State if no offer to the public is contemplated in France or any other EEA Member States.

iii The AMF and the Prudential Control and Resolution Authority

The four roles entrusted to the AMF (regulation, authorisation, supervision and enforcement) place that authority at the core of the French financial regulatory system. The AMF sets the principles of organisation and operation that are applicable to market operators, such as Euronext Paris, authorises the creation of open-end and closed-end funds and regulates capital market activities and disclosures by listed companies. It also extends visas for issues of debt and equity securities offered to the public or to be traded on an exchange.

In addition, an AMF ombudsman, which provides assistance to non-professional investors (consumers and non-profit associations), has been established along the same lines as the Swedish ombudsman model.

The AMF is divided into two bodies, a board and an enforcement committee, that operate separately and independently of one another. The board sets the AMF's policy and supervises its oversight function. It also acts as regulator and approves any amendment to the RG-AMF. In cases of infringement of the provisions of the M&FC or of the RG-AMF, the Secretary General of the AMF directs controls and investigations. At the end of an initial inquiry phase, the board opens a sanction procedure and may submit grievances to the enforcement committee. There is then an investigation procedure led by the enforcement committee, which may impose sanctions.

According to Article L621-15 of the M&FC, the enforcement committee may impose sanctions on professionals controlled by the AMF, individuals under the supervision of these professionals and other persons acting on their own.

The aim of creating the AMF, which is vested with strong regulatory supervisory and enforcement authority, was to strengthen the protection of investors. In this regard, several decisions of the Supreme Court during the past few years have endorsed this position and have strengthened the advisory duties of financial services providers to inform their clients of the risks linked to financial products. This obligation consists not only in informing a client, but also in assessing a client's ability to properly understand the nature of speculative operations under consideration.

In the interests of transparency, the duties of financial services providers and distributors have been increased, the general perception being that this is also justified by the market environment and the atmosphere of uncertainty produced by the 2008 financial crisis. Like other countries, France implemented its own institutional reform of its financial supervision system in 2008, and subsequently implemented the various European directives reforming the European financial framework.

The Prudential Control and Resolution Authority (ACPR) shares supervisory authority over investment firms with the AMF. Pursuant to Ordinance No. 2015-1024 of 20 August 2015 (the Banking Reform), the ACPR has been given resolution authority, and the scope of its powers and duties has been expanded accordingly. Among its extended powers, the ACPR can order the transfer of all or a portion of credits or deposits of credit institutions if the solvency or liquidity of institutions subject to its authority, or the interests of insured clients or their members, are in jeopardy or susceptible to being in jeopardy.

The AMF and the ACPR's investigative and supervisory powers have been strengthened, including through the authority to require documents and information from entities subject to their supervision to ensure the performance of their mission of monitoring and supervision.

The recent PACTE Law, which was enacted on 22 May 2019, extends the prerogatives of the AMF in respect of sustainable finance by specifying that the AMF must ensure the quality of the information provided by management companies for the management of collective investment schemes on their investment strategy and their management of the risks related to the effects of climate change.

A Climate and Sustainable Finance Commission was set up by the AMF to bring together and foster cooperation between stakeholders on sustainable finance and facilitate exchanges with the AMF in carrying out its regulatory and supervisory missions on issues related to sustainable finance. Since its creation, the Climate and Sustainable Finance Commission has worked on several matters, such as the European Commission's consultation on a renewed sustainable finance strategy, the EU inception impact assessment on the revision of the Non-financial Reporting Directive and, more importantly, by contributing to the publication of the first AMF policy on investor information regarding climate change. This position clarifies the use that may be made of non-financial characteristics relating to the assets invested by asset managers and collective investment schemes. One aspect of the rationale behind this regulation is to prevent greenwashing by asset managers.

The year in review

i Impact of the covid-19 crisis

As a consequence of the health crisis, a state of health emergency was declared in France by Law No. 2020-290 of 23 March 2020 for a period of two months, which was then extended until 10 July 2020.

In this context, several ordinances were adopted by the French government to adapt the French legal framework to the pandemic crisis. Among the measures adopted were the extension of certain deadlines and the suspension of termination clauses, including the following:

  1. extension of legal and contractual deadlines: certain time limits (for legal actions, formalities, registrations, declarations) have been extended during the state of health emergency;
  2. suspension of termination and penalty clauses during the state of emergency: penalty clauses, termination clauses and forfeiture clauses sanctioning contractual non-performance are rendered ineffective during the state of health emergency;
  3. extension of certain administrative or judicial deadlines: various administrative or jurisdictional delays whose term expires during the state of health emergency have been automatically extended until the expiry of a two-month period at the end of the state of health emergency
  4. extension of the notice period for renewable contracts: the notice period for renewable contracts (i.e., contracts that may be terminated only during a specified period or automatically renewed if not rejected within a specified period) expiring during the state of health emergency is extended until after the end of the state of health emergency. Thus, the notification of non-renewal of a contract may be given within two months of the end of the state of health emergency period; and
  5. modification of the French insolvency regime (see Section II.v).

ii Recent developments affecting debt and equity offerings

Recent developments mainly relate to the implementation of the Prospectus Regulation on 21 July 2019 and to the emergence of a new regulation regarding cryptocurrencies, tokens and related transactions (initial coin offerings (ICOs)).

Modification of the French legal and regulatory framework following the entry into force of the Prospectus Regulation on 21 July 2019

Aimed at facilitating access to the market by companies without compromising on the information communicated to investors, the Prospectus Regulation (and two delegated regulations) fully entered into force on 21 July 2019. The Prospectus Regulation provides, inter alia, that:

  1. Member States can exempt offers of securities to the public with a total consideration in the European Union of between €1 million and €8 million (calculated over a 12-month period) from the requirement to publish a prospectus; in this respect, France decided to exempt offers of securities below the threshold of €8 million from the publication of a prospectus;
  2. a universal registration document detailing the issuer's business and financial position may be filed with a competent authority every year. This document may then be incorporated by reference into the prospectus. This mechanism (which has existed in France for many years) would enable issuers to have their prospectuses approved more quickly by a competent authority; and
  3. the prospectus summary is to be shortened to a maximum length of seven A4 pages. A set format will be required, based on the key information document for packaged retail and insurance-based investment products (PRIIPS), with four main sections specifying the following:
    • introductory warning language;
    • key information about the issuer;
    • key information about the securities; and
    • key information about the offer of securities to the public and admission to trading.

The entry into force of the Prospectus Regulation, resulted in a revamping of the French public offering regime. This reform has been formalised by Ordinance No. 2019-1067 of 21 October 2019, Decree No. 2019-1097 dated 28 October 2019 and an order dated 7 November 2019. Furthermore, several amendments to French law and the RG-AMF were necessary for the correct 'negative' implementation under French law of the Prospectus Regulation. The rationale behind these changes was to:

  1. stipulate the consequences under French law of the change in the definition of the public offering of securities as it is now conceived by the Prospectus Regulation. The Prospectus Regulation actually extends the definition of offers to the public to include offers not previously considered to be offers to the public under French law (such as private placements). Given this new definition, French regulations have to be adapted with the objective in particular of allowing, without additional constraint, the continuation of private placements and crowdfunding offers; and
  2. ensure the negative transposition of the Prospectus Regulation: this negative transposition involves, in particular, deleting or modifying numerous articles of the M&FC and of the RG-AMF that have now been replaced by directly applicable provisions of the Prospectus Regulation. In addition, French regulations have also been adapted to implement into domestic law the options left to the discretion of Member States and, in particular, the threshold below which no prospectus is required. France has chosen to exempt issuances of less than €8 million from the requirement for publication of a prospectus.

On June 2020, the AMF issued a new handbook entitled 'Guide to preparing prospectuses and information to be provided in the event of a public offering or admission to trading of financial securities'. This guide is divided into three sections: information to be provided in prospectuses; information to be provided if no prospectus is required; and AMF positions and recommendations regarding the different types of transactions (such as IPOs, mergers, etc.)

It should be noted that in response to the severe economic crisis resulting from the covid-19 pandemic, the European Commission proposed a legislation package that would, inter alia, modify the Prospectus Regulation to create a new 'EU Recovery Prospectus' – a type of short-form prospectus – to facilitate the raising of capital in public markets.

Registration of securities through the use of blockchain

France was the first country to introduce the mandatory and general dematerialisation of securities as early as 1984. In view of ongoing initiatives in Europe aimed at strengthening the integration of securities markets and at adopting a common approach to securities law, Ordinance No. 2009-15 was published on 8 January 2009. Through the enactment of this reform, the French legislature sought to modernise French securities law and reinforce its attractiveness, competitiveness and security. Dispositions on transfers of ownership, pledges, repurchased transactions, securities loans and security for financial obligations are brought together in Book II, Title I, Chapter I. A distinction is made in respect of financial instruments between securities (including both equity and debt instruments issued by stock companies, and participations in collective investment undertakings, all of which are susceptible to being credited to a securities account) and financial contracts (which correspond in essence to derivatives and forward financial instruments). Key modifications focus on strengthening ownership rights over securities credited to a securities account and protecting bona fide acquirers of securities.

Ordinance No. 2017-1674 of 8 December 2017 introduced a significant change to the legislation relating to the ownership and transfer of securities by allowing and recognising the validity of transfers of non-listed securities through a shared digital recording device, which refers to the blockchain technology also called distributed ledger technology. This digital registration has acquired the same legal value as a book-entry registration, and the type of registration is chosen by the issuer. Decree 2018-1226 dated 24 December 2018 provided implementing provisions for this new regime. This legal innovation made France a pioneer country in the acknowledgment and use of blockchain-based services.

ICOs

The PACTE Law introduced into French legislation a new legal framework for fundraising via the issuance of tokens (ICOs) that are not classified as financial instruments. Previously, no specific rules applied to fundraising through the issuance of tokens. The PACTE Law gives the initiators of a project the option to submit an information document to the AMF to obtain an optional visa, subject to the token issue meeting the requirements outlined below.

A token is defined by the PACTE Law as any intangible property representing, in digital form, one or more rights that may be issued, registered, retained or transferred by means of a shared electronic recording device that identifies, directly or indirectly, the owner of that property (i.e., blockchain).

An ICO consists of proposing to the public, in any form whatsoever, subscription to these tokens. An ICO that is open to subscription by a restricted circle of fewer than 150 investors, acting on their own behalf, is not considered a public offer of tokens.

Token issuers who wish to carry out an ICO may apply for an approval from the AMF, which will verify whether the offering provides the following guarantees:

  1. the token issuer is incorporated as a legal entity established or registered in France;
  2. an information document (commonly called a white paper) has been drawn up in accordance with Article 712-2 of the RG-AMF and with AMF Instruction DOC-2019-06;
  3. the issuer has implemented a procedure enabling the monitoring and safeguarding of the funds raised by the ICO; and
  4. the token issuer has put in place a system to ensure compliance with its obligations relating to anti-money laundering and combating the financing of terrorism.

In March 2020, the AMF released its legal analysis of the rules applying or likely to apply to security token transactions (STOs) such as issuances of security tokens, acquisitions of security tokens by funds, and settlement and delivery of security tokens; the analysis discusses whether such transactions comply with existing regulations (both EU and French) or whether changes to the regulations are required to allow a harmonised development of STOs. The AMF concluded that STOs were generally compliant with current legislation but the legislation could be improved to increase legal certainty. The AMF was one of the first authorities across Europe to conduct such an analysis.

Following this report, the AMF also issued a position to provide some clarification regarding the distinction between the concept of a trading venue (applicable in particular to financial securities registered in a distributed ledger) and that of a bulletin board (used to advertise buying and selling interests). This clarification was awaited by certain platforms and other participants in the financial sector seeking to develop STO exchange interfaces in compliance with existing regulations but without the requirement to obtain financial service provider authorisation from the ACPR and the AMF.

Digital asset service providers

The PACTE Law introduces a new regulatory framework applying to digital asset service providers (DASPs): it creates an optional licence for DASPs, which constitute a new category of regulated service providers licensed and placed under the supervision of the AMF.

The term 'digital assets' encompasses tokens issued through an ICO and virtual currencies as defined by European law (such as bitcoin). Financial instruments are excluded from this regime.

In particular, the following activities may be carried out by DASPs:

  1. custody of digital assets for third parties;
  2. purchase or sale of digital assets against legal tender or other digital assets (broker-dealers);
  3. operation of a digital assets trading platform (stock exchange); and
  4. other digital assets services such as the reception and transmission of third-party orders, third-party portfolio management, advice, underwriting and placing on or without a firm commitment basis.

Licensed service providers will be subject to a set of core rules common to all services (insurance or equity, internal control procedures, resilient IT system, transparent pricing policy, etc.) as well as a certain number of rules specific to the service offered.

As an exception to the above, service providers who wish to provide digital asset custody services to third parties or to purchase or sell digital assets in exchange for legal currency are subject to mandatory registration with the AMF.

Recent foreign investment regime changes

The PACTE Law aims at strengthening the sanction regime relating to foreign investment screening by providing the Minister of Economy with a wider scope of sanctions and enforcement powers.

In particular, once a foreign investor fails to file for and obtain an investment authorisation when required by French regulations, in addition to civil sanctions of nullity, the Minister may, under the new rules, issue an injunction requiring the investor to file an application for investment authorisation, abandon the transaction and restore the previous situation at his or her own expenses or modify the transaction.

Furthermore, new powers are vested with the Minister of Economy in cases where conditions linked to a foreign investment authorisation are not fulfilled or are breached by an investor. Remedial measures include the revocation of an initial authorisation, the imposition of new conditions to be complied with within a specified time frame or the obligation to meet initial conditions.

In cases where national interests are likely to be jeopardised, the Minister has the right to take provisional, conservatory measures to protect national interests. These may include:

  1. a suspension of voting rights;
  2. a prohibition or limitation on the distribution of dividends or other remuneration attached to shares;
  3. a restriction on the free disposal of all or certain assets; or
  4. the appointment of a representative authorised to veto any decision of a corporate body whose expenses are covered by a company concerned.

In advance of the PACTE Law, the government adopted a decree in November 2018 that came into force on 1 January 2019. This decree expands the prior authorisation regime to new strategic sectors such as those involving space operations, electronic and computer systems required for public security purposes and data storage activities, and research and development in the fields of cybersecurity and artificial intelligence.

More recently, a decree dated 31 December 2019 further reinforced the French foreign investment control regime. Inter alia, the decree expanded the list of strategic sectors (i.e., sectors in which foreign investments require authorisation) to include energy storage, quantum technologies, and media and agriculture. It also amended the prior notice procedure to allow investors to ask the French authority whether the activities carried out by the target entity fall into the strategic sector category. In addition, the threshold for triggering the authorisation procedure has been lowered from 33 per cent to 25 per cent of the target's voting rights for investors established outside the EU or EEA. The concepts of 'investor' and 'chain of control' have also been clarified.

As a response to the covid-19 crisis, Decree No. 2020-892 dated 22 July 2020 lowered the threshold below which prior authorisation is required in respect of listed companies, from 25 per cent to 10 per cent but only until 31 December 2020.

iii Developments affecting derivatives, securitisations and other structured products

Derivatives and the Netting Law

The French netting regime of derivatives (i.e., the Netting Law) is governed by the provisions of Article L211-36 to L211-40 of the M&FC, which transposed into French law the EU Collateral Directive, as amended. It is applicable, inter alia, to financial obligations resulting either from transactions on financial instruments (within the meaning of Articles L211-1-I and D211-1A of the M&FC) if at least one of the parties to the transactions is a qualifying party (credit institutions, investment services providers, etc.), or from any contract giving rise to cash settlement or to delivery of financial instruments if both parties to the contract are qualifying parties.

As far as transactions involving financial instruments are concerned, Article L211-1 of the M&FC defines financial instruments (which include financial securities such as shares and other securities issued by stock companies; debt instruments, other than payment instruments and loan notes; and units or shares in collective investment undertakings) and financial contracts (also known as forward financial instruments, which are further defined in Article D211-1-A of the M&FC)).

If both parties are qualifying parties under the Netting Law, the scope of qualifying transactions is wider and includes any financial obligations that result from any contract giving rise to cash settlement or to delivery of financial instruments. Accordingly, all financial obligations resulting from transactions on financial instruments are included in the scope of qualifying transactions in that case.

Article L211-36-II of the M&FC extends the scope of application of the Netting Law to instruments that may not fall within the scope of the definition of financial instruments under MiFID II. Article L211-36-II of the M&FC provides that, for the sole purposes of the Netting Law, options, futures, swaps and any forward contracts other than those mentioned in Article L211-1-III of the M&FC (i.e., MiFID-qualifying forward financial instruments) are considered as forward financial instruments provided that they give rise, in the context of trading, to registration by a recognised clearing house or to periodical margin claims.

Note that the Banking Reform contemplates that when exercising rights available under the resolution tools vested in the ACPR, the ACPR may order the transfer of one or more business units by operation of law under the regime of universal transfer of patrimony to a third party, or of asset rights and obligations to a bridge institution. It is specified that, notwithstanding any legal or contractual provision to the contrary, contracts related to transferred activities are continued, and no termination or set-off may occur solely as a result of a transfer or assignment.

It is further specified that transactions governed by contracts covered by Article L211-36-1 of the M&FC (which covers transactions on financial instruments, including derivatives, repos and securities lending transactions), when transferred under the resolution tool regime to a third party or to a bridge institution, may only be transferred as a whole. Termination rights (close-out netting) may not be exercised solely on the basis of a resolution measure having been executed, unless a transfer carried out in accordance with the exercise of resolution powers does not make provision for such contracts. Furthermore, in the exercise of its resolution authority, the ACPR may elect to suspend the exercise of termination and close remedies under contracts governed by Article L211-36-1 in respect of all or part of the relevant contract concluded with the entity under resolution until midnight on the business day following the publication of the ACPR's motivation for the suspension.

When contracts have been transferred as stated above, within the scope of the exercise by the ACPR of its resolution authority, in our view this would permit the exercise of termination rights post-transfer in the event of the occurrence of a post-transfer default.

Arrangements are also stipulated to ensure that such a transfer may not affect the operation of systems governed by Article L330-1 et seq. of the M&FC (covering interbank payment systems and delivery versus payment designated systems where only part of but not all assets, rights and obligations are transferred to another person in this way).

The French netting and collateral regime has recently been modified by the Sapin II Law, which extended the French close-out netting regime to financial obligations between a CCP, a clearing member and a client; allows third parties to post collateral; and provides an effective segregation of collateral posted as initial margin pursuant to Article 11 of the European Market Infrastructure Regulation (EMIR).

The collateral exchange requirements apply to financial entities dealing in derivatives and to non-financial firms whose derivatives positions exceed the clearing threshold. They apply to all OTC derivative contracts that are not centrally cleared. They are progressively taking effect, following an agreed schedule that started in February 2017.

The PACTE Law introduces new measures specifically concerning derivatives:

  1. the PACTE Law extends the material scope of the Netting Law provisions described above to various operations, including, inter alia, units mentioned at Article L. 229-7 of the Environment Code, foreign exchange spot transactions and transactions on precious metals (including gold, silver, etc.),
  2. in view of an anticipated termination of the passport rights of UK credit institutions after Brexit, the PACTE Law provides a mechanism of 'replication' of the master agreements executed with UK credit institutions that are currently in force; this mechanism will allow, under certain conditions, the parties to such master agreements to terminate the existing agreements and execute similar agreements with an EU (non-UK) credit institution; and
  3. it provides a derogation to Article 1343-2 of the French Civil Code relating to the compounding of interest (pursuant to which the capitalisation of interest is permitted only where said interest has accrued for at least one year); this derogation allows the compounding of interests on periods shorter that one year when calculated pursuant to a market master agreement.

Implementation of EMIR

EMIR was published in 2012. It affects all entities active in the EU derivatives market whether they use derivatives for trading purposes, to hedge themselves against a particular risk or as part of their investment strategy.

EMIR imposes three main obligations on market participants, namely:

  1. clearing via a CCP of certain OTC derivatives entered into between certain market participants;
  2. reporting of all derivative transactions to a trade repository that were entered into since, or that were outstanding on, 16 August 2012; and
  3. subjecting OTC derivatives that are not cleared via a CCP to risk mitigation obligations, which include, in particular:
    • the timely confirmation of transactions;
    • performing of daily mark-to-market valuations of transactions;
    • having dispute resolution processes in place;
    • engaging in portfolio reconciliation;
    • considering portfolio compression; and
    • exchanging collateral.

The final stage of implementation of EMIR (i.e., collateral requirements for non-centrally cleared derivatives) has progressively taken effect from February 2017.

Mandatory central clearing is a risk mitigation technique. When a contract is cleared, a CCP is interposed between the two parties to an OTC derivative contract. The aim of clearing is to promote financial stability by reducing counterparty credit risk (as parties become exposed to the CCP's credit risk instead of each other's) and operational burdens, as well as increasing transparency and standardising the default management process. The clearing obligation under EMIR will only apply if the relevant OTC derivative is of a class that has been declared subject to the clearing obligation by the European Commission and the European Securities and Market Authority (ESMA) and is entered into between any combination of financial counterparties (FCs) and non-financial counterparties (NFCs) that are above certain thresholds (NFC+s) (or certain entities established outside the European Union that would be an FC or NFC+ if they were established within the EU).

Cryptocurrency derivatives

On March 2018, the AMF released a legal analysis that it had carried out on cryptocurrency derivatives. As a result of this analysis, in certain cases, cryptocurrency derivatives may be classified as financial instruments pursuant to Article D211-1 A I of the M&FC, and therefore are subject to the related regulation thereof, in particular the requirement for participants who market those products to be regulated and to be authorised to provide investment services, compliance with EMIR and a ban on advertising on certain financial contracts.

Securitisation and the skin-in-the-game rule

In the wake of the 2008 financial crisis, regulations regarding the calculation of capital requirements of credit institutions and investment firms have been amended to include a 5 per cent retention requirement for originators of securitisations.

This retention requirement, often referred to as the skin-in-the-game rule, was initially set out in two separate sets of amendments to the Capital Requirement Directive (referred to as CRD II and CRD III), and transposed under French banking regulations by way of an amendment to an Order dated 20 February 2007.

The provisions of Regulation (EU) 2017/2402 of 12 December 2017 lay down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation, which entered into force on 1 January 2019. This Regulation establishes, inter alia, harmonised due diligence and transparency requirements for investors. It also prohibits resecuritisations and creates a label and a legal framework for simple, transparent and standardised securitisations, which allows preferential prudential treatment. More importantly, it establishes a new direct obligation to retain a 5 per cent material net economic interest. Implementing and delegated acts of this text are still awaited.

The obligation for the originator, sponsor or original lender to retain a 5 per cent stake is a material consideration for institutions resorting to securitisation, and one that may influence the appetite of market participants for the acquisition of securities in such a securitisation.

Creation of financing vehicles and modernisation of securitisation legislation

In Ordinance No. 2017-1432, of 4 October 2017, which entered into force on 3 January 2018, the French legislature created a broad category of debt funds named 'financing vehicles', regrouping the existing securitisation vehicles (OT) and a new category of regulated funds named specialised financing vehicles falling within the scope of the AIFMD that may benefit from the European long-term investment fund label.

This Ordinance also introduced the possibility for French securitisation funds to grant loans to non-financial companies and to enter into loan sub-participations. These funds may also benefit from the Dailly Law assignment regime, which is a simplified way of transferring professional receivables that was formerly reserved to credit institutions.

Further, as a response to the covid-19 crisis, the European Commission has proposed encouraging a broader use of securitisation in the recovery phase, by freeing up bank capital and supporting banks in their efforts to enhance lending to households and businesses. The amendments would extend the 'simple, transparent and standardised' framework to on-balance-sheet synthetic securitisation and remove regulatory obstacles to the securitisation of non-performing exposures.

High-frequency trading

The Banking Reform regulates high-frequency trading (HFT) by specifying that any person using automatic trading systems must:

  1. report to the AMF the use that has been made of such systems to generate, buy and sell orders of securities issued by companies that have their head office in France;
  2. ensure that the order directed to a regulated market or a multilateral trading facility is traceable;
  3. keep a record of any element allowing a link to be established between a given order and the algorithms used to determine that order; and
  4. keep a record of the algorithms used to elaborate the orders transmitted to the markets, and transmit those algorithms to the AMF upon request.

In addition, the Banking Reform provides for new duties applicable to market operators or persons who operate multilateral trading facilities to ensure that their systems have the capacity to handle the number of orders generated by automatic trading systems, so as to permit orderly trading under highly volatile market conditions. There must be mechanisms in place to permit the suspension or rejection of orders exceeding set thresholds or otherwise in the event of manifestly erroneous trades. There must be procedures in place of such a nature as to maintain the orderly functioning of the markets.

New rules on algorithm trading: MiFID II

Algorithm trading and HFT have been regulated by the M&FC since MiFID II was transposed into French law on 23 June 2016. The entry into force of the Directive, which was delayed until 3 January 2018, provides for:

  1. implementation of a harmonised regime of minimum tick sizes based on the price and liquidity of stocks, deposit certificates and exchange traded funds traded on European trading platforms;
  2. strengthening of the organisational requirements of market actors using algorithm trading to ensure their trading systems' resilience. These requirements include imposing on investment companies the obligation to notify the competent authority and test the algorithms they use, and for trading platforms to implement the necessary measures to enable the realisation of these tests, the identification of the algorithms used by their members by marking orders or the suspension of the provision of direct electronic access by a member. Market actors using HFT are subject to the obligation to maintain and deliver, on request, to the competent authority their order data;
  3. supervision of the market-making activity with the introduction of common minimum requirements applicable to anyone wishing to exercise this activity, and requirements to ensure that device platforms are fair and non-discriminatory and provide for incentive mechanisms during stress periods; and
  4. supervision of the fee structures of trading platforms that need to be transparent, fair and non-discriminatory.

Trading of agricultural commodities

The Banking Reform introduces new regulations with a view to fighting excessive speculation in relation to trading of agricultural commodities. The AMF is vested with the authority to set, as from 1 July 2015, thresholds of positions that a single person may hold in financial instruments the underlying assets of which include an agricultural commodity. In 2017, it issued several positions setting the position limits for certain commodities traded on Euronext (Position 2017-12) and Powernext (Position 2017-11). The AMF will also be responsible for specifying exemptions to the thresholds where positions are taken for hedging purposes.

Furthermore, persons whose positions exceed thresholds specified in the RG-AMF for financial instruments that include underlying assets of an agricultural commodity will be subject to specific daily reporting to the AMF. Aggregated positions will be published weekly by the AMF.

iv Cases and dispute settlement

Non bis in idem

The French Constitutional Council, in a landmark decision following the jurisprudence of the European Court of Human Rights in its Grande Stevens decision, ruled on 18 March 2015 that the same person could no longer be prosecuted and sentenced twice for the same facts by the AMF, the enforcement committee and a French criminal court.

In its decision, the Constitutional Council considered the legal provisions setting out criminal prosecution for insider trading offences and those providing for administrative prosecution for insider trading breaches to be unconstitutional on the grounds that the criminal and administrative definitions of insider trading are similar, aim at punishing the same facts and protect the same public interest.

Until this decision, and according to previously well-established jurisprudence, cumulating both administrative and criminal sanctions was deemed consistent with the French Constitution, provided, however, that the total penalties did not exceed the maximum possible amount under either offence.

The 18 March 2015 Constitutional Council decision was deemed to have an immediate effect, including on individuals who had already been sentenced or prosecuted by the AMF or a French criminal court.

Questions remained as to how and when criminal courts would align their case law; in two decisions dated 6 and 18 May 2015, the Paris Criminal Court applied this new principle to cumulative prosecutions under market abuses where the AMF had already prosecuted the case, even if defendants had not been sanctioned by the AMF (this was notable in the EADS case). These decisions concern insider trading cases but should also cover market manipulation and false information-spreading offences.

The censored provisions were amended by a law dated 21 June 2016 that reorganised the M&FC relating to market manipulation. The new provisions maintain a duality of procedures with administrative and criminal prosecutions but create a referral mechanism to ensure that a person is not prosecuted and condemned twice for the same acts. Therefore, a prosecutor cannot bring a criminal prosecution for insider trading when the AMF has already started an administrative prosecution against the same person and for the same offence. Similarly, the AMF cannot start an administrative sanction procedure when the prosecutor has already started a criminal prosecution for the same market manipulation. However, both the AMF and the criminal courts can start prosecutions after mutual consultation. In the absence of an agreement, both parties are heard by the General Prosecutor of the Paris Court of Appeal, who renders a decision on allowing the criminal proceedings.

It is important to point out that this law also modifies the sanctions applicable for market manipulation by raising them to five years' imprisonment and up to €100 million in fines. This amount may be increased up to 10 times the amount of the benefit derived from the manipulation, without the fine being inferior to this benefit.

Derivatives: liabilities of financial intermediaries

A number of cases have also addressed the issue of the duty of a financial intermediary to inform its counterparty of the way it will be remunerated in respect of hedging arrangements concerning commodities. In one case, the issue at stake was the setting up by a bank, at the request of its client, of hedging transactions against a decline in the nickel price in the form of zero-premium options. The client was challenging the underwriting and implementation conditions of these transactions. The Paris Court of Appeal, in a decision dated 26 September 2013, ruled that the bank had the duty to inform its client of the way it was going to be remunerated and ordered the bank to pay damages (US$8 million) to its client for breach of its duty of information.

In its decision dated 17 March 2015, the French Supreme Court quashed the Court of Appeal decision and referred the parties before the same, but differently composed, Court of Appeal.

The Supreme Court ruled in particular that the Court of Appeal breached Article 1147 of the Civil Code by considering that the bank was bound by a duty to inform its client of the methods it was using to draw benefit from the transactions.

On 4 May 2010, the Supreme Court ruled on a matter arising from Lehman-related prime brokerage transactions, in which Lehman Brothers International (Europe) (LBIE) acted as prime broker for a French alternative investment fund (AIF) and a French credit institution acted as a depository. Following the LBIE insolvency, the investment fund requested that the credit institution act as a depository to redeliver the assets to fund investors under prime brokerage with LBIE. The credit institution had filed an appeal against an AMF injunction to redeliver those assets. The Paris Court of Appeal upheld the AMF injunction and the Supreme Court confirmed that decision, all on the basis of overriding public policy considerations. It also dismissed on the same grounds defences raised under the provisions of Article 5.2 of the EU Collateral Directive regarding resort by the collateral taker to the remedy of set-off where the security collateral arrangement so provides. The Supreme Court disapplied the provisions of the prime brokerage agreement in respect of the right of use that prohibited the resort to setting-off the value of equivalent collateral against the discharge of financial obligations.

The liability of a depository in the context of a French AIF using prime brokerage services is governed by the provisions of Ordinance No. 2013-676, of 25 July 2013, which transposes the AIFMD into French law.

Margin disclosure obligations applying to investment service providers

The issue of whether an investment service provider is required to disclose its remuneration and profit margins to its counterparty contracting party has been subject to several judicial decisions in France. In a decision dated 26 September 2013, the Paris Court of Appeal considered that an investment service provider should inform clients of banks' margins relating to the hedging transaction they had entered into. However, this decision was overruled by the Supreme Court in a judgment dated 17 March 2015, where the judges considered that the investment service provider, as a party to a hedging agreement against the risk of fluctuation in commodity prices, was not required to disclose the expected profit to the other party.

UBS case: solicitation on the French territory

One notable case in 2018 and 2019 in the French judicial landscape was the UBS case. In this case, UBS AG was found guilty by the French Court of First Instance of Paris of unlawful solicitation of clients on the French territory and helping them to implement tax evasion schemes, and was sentenced to pay €3.7 billion in penalties and €800 million in damages. The Court also found the French branch of UBS guilty of complicity in the same illegal conduct, ordering it to pay €15 million in penalties.

These penalties could constitute a turning point in the judicial repression of banking and financial institutions involved in illicit activities. Furthermore, penalties of this amount are without precedent in France. As a comparison, in the same case, the French Prudential and Control Authority imposed a €10 million penalty on UBS France, and in a case similar to UBS, to settle a long-running investigation into charges of the same kind, HSBC agreed in 2017 to pay €300 million through a judicial public interest agreement, which is the French equivalent of a US deferred prosecution agreement, introduced by the Sapin II Law.

Although UBS lodged an appeal, the Court of First Instance decision might be a sign that unlawful financial solicitation in France will be repressed judicially in future.

Euro medium-term notes qualification

Euro medium-term notes (EMTNs) are debt instruments that have a shorter maturity than bonds and that bear a fixed or floating interest rate or a yield linked to an index or a formula, and a repayment amount that is fixed, variable or linked to a formula or index. Although EMTNs are not directly regulated by French law, it is commonly admitted that they fall within the category of debt securities within the meaning of Article L 211-1 of the French Monetary and Financial Code.

In a case brought before the Paris Court of Appeal, it was argued by an investor who bought an EMTN through its life insurance contract that a structured EMTN does not qualify as a bond (obligations) since its repayment amount could be for less than its nominal amount and thus was not a financial instrument eligible to life insurance contracts. The Court of Appeal followed this reasoning and condemned the insurer to pay damages to the investor. This decision was quashed by the French Court of Cassation in a decision of 23 November 2017 on the grounds that the qualification of a security as a bond (obligations) is not subject to the full repayment of the relevant security.

This decision clarified a debated legal issue in a way that brings more legal certainty as to the legal and tax regime regarding EMTNs in France.

Market information and insider dealing

In 2018, the sanction board of the AMF rendered several decisions regarding insider dealing.

In particular, in a decision of the AMF enforcement committee of 24 October 2018, the AMF ruled that knowledge of the forthcoming publication of a press article giving substance to a rumour may constitute inside information, provided that this knowledge meets the conditions of precision, non-publicity and significant influence on the stock price. These conditions were met in the case at hand in view of the reputation of the journalist and the precision of the rumour, and the context of the market made this rumour credible and therefore sensitive for the market. However, the rumour itself was not deemed to be inside information.

With the knowledge of a rumour being considered inside information, a journalist at the source of such information would therefore be considered an insider and could not disclose such information other than for the purpose of journalism. By disclosing this information to a single person, the journalist in the case at hand breached the obligation to refrain from disclosing or using inside information and committed a market abuse.

As a result of this case, and in accordance with Article 21 of the Market Abuse Regulation (MAR) regarding disclosure or dissemination of information in the media, for an authority to assess whether a journalist has committed a market abuse, the authority must review the code of conduct applying to the journalist and assess whether it prohibited the way the journalist dealt with the financial information that he or she had produced or disseminated.

In a decision dated 11 December 2019, the press agency Bloomberg LP was fined €5 million by the enforcement committee of the AMF for having disseminated, without verification, information that it should have known to be false and likely to set the price of the shares of a listed company (Vinci) at an abnormal or artificial level. This decision means that the protection afforded to journalists under the MAR is conditional upon them acting in good faith to provide information that is exact and credible.

More recently, in an important decision of 1 April 2020, the criminal chamber of the Court of Cassation ruled in an insider dealing case that French authorities have jurisdiction to prosecute and judge an inside deal where none of the shares concerned in the underlying transactions were admitted to trading on a French regulated market (the issuer in the case was listed in New York). This decision means that the reference to the 'regulated markets' in the French provision prohibiting insider dealing is not limited to French regulated markets and extends to all regulated markets, therefore allowing an expansive interpretation of the scope of the offence of insider dealing under French law.

Market manipulation

Over the past few years, the AMF enforcement committee has also rendered several decisions regarding market manipulation.

Provisions regarding market manipulation were provided in the RG-AMF that have now been replaced by equivalent provisions of the MAR. In a case dated 16 July 2018, the enforcement committee of the AMF had the opportunity to clarify how MAR provisions could only apply to market manipulations that occurred before the MAR's entry into force if the provisions are more lenient in accordance with the principle of retroactivity in mitius.

The market manipulation that was sanctioned in this case was carried out on the MATIF, which is the regulated market for derivatives products in France, and resulted in particular from sell orders placed by a company on a futures contract 'in the last 10 seconds before closing, at a distance very close to the last buyer limit . . . on the smallest possible amount and having a period of validity limited to the same day'. This approach was repeated each day for more than four months with a few exceptions, and had the effect of reducing the bid ask spread.

Although selling orders were not cancelled, they had little chance to be executed, and therefore the AMF assimilated the low probability of the sell orders to the cancellation of an order. The market manipulation was therefore evidenced as, in accordance with Article 12.1(a) of MAR, the transactions consisted in placing an order to trade or any other behaviour 'which gives, or is likely to give, false or misleading signals as to the supply of, demand for, or price of, a financial instrument'.

In a decision dated 4 December 2019, the enforcement committee of the AMF ruled that it had jurisdiction over a market manipulation case that took place outside France (in London). The market manipulation concerned the massive acquisition by Morgan Stanley International of futures in OATs (French bonds) and, a few minutes later, the sale of OATs (not the futures from the initial acquisition, but the bonds directly). French law provides that the AMF enforcement committee may have jurisdiction where the market manipulation concerns (1) financial instruments traded on a regulated market supervised by the AMF and (2) financial instruments related to such financial instruments traded on such a regulated market. Therefore, the fact that the sale transaction in question took place in London was irrelevant in determining the jurisdiction of the AMF enforcement committee since the French bonds were traded on a French regulated market. Regarding the acquisition of futures, there remained doubt about whether the two financial instruments (i.e., the futures and the underlying OAT) were 'related' within the meaning of the French regulation. The enforcement committee clarified that the term 'related' shall mean a factual (and not a legal) link or relation between the two financial instruments. As a result, since the futures were factually related to a financial instrument (the OATs) admitted to trading on a French regulated market, the enforcement committee had jurisdiction to sanction the market manipulation.

v Insolvency law

Insolvency, composition or rehabilitation proceedings in France are proceedings of judicial reorganisation and judicial liquidation governed by the bankruptcy provisions contained in the Commercial Code. Since 2006, these proceedings have been supplemented by a safeguard proceeding as a result of the enactment of Ordinance No. 2010-1249 of 22 October 2010 (the Safeguard Law), effective from 1 March 2011. Pursuant to the Safeguard Law, the judicial reorganisation proceeding, the judicial liquidation proceeding and the safeguard proceeding are supplemented by an accelerated financial safeguard procedure, which allows a debtor to reach a voluntary restructuring agreement with its primary financial creditors (financial institutions and bondholders) on an accelerated basis. This corresponds roughly to the equivalent of a US Chapter 11 prepackaged reorganisation plan.

Ordinance No. 2014-326 of 12 March 2014 introduced an accelerated safeguard proceeding. More recently, as a result of the covid-19 crisis, the French legislature jointly with the government enacted several acts to mitigate the effects of the crisis on French companies. In that respect, Ordinance No. 2020-318 of 25 March 2020 introduced several changes to the French insolvency regime. Inter alia, this Ordinance provides that a company in reorganisation, judicial liquidation or safeguard proceedings may benefit from a full postponement or a staggering of its rents and its bills (water, gas and electricity ) for its professional and commercial premises. The payment deadline must be between 12 March 2020 and 10 September 2020. No financial penalty, suspension, interruption or reduction of supplies will apply during this period.

vi Role of exchanges, CCPs and rating agencies

CCPs

Article L440-1 et seq. of the M&FC provides that clearing houses ensure monitoring of positions, margin calls and, if need be, mandatory liquidation of positions. A clearing house is required to have the status of a credit institution, and its operating rules are approved by the AMF, the French markets and the securities regulator.

The Banking Reform modifies the legal regime applicable to French clearing houses, with particular attention to the conditions under which, in the event of default by a participant, a clearing house may transfer the position and collateral of the participant's clients to another participant.

Relations between the clearing house and participants are governed by contract. Banque Centrale de Compensation is an LCH SA entity licensed as a bank through which clearing operations are carried out, operating under the LCH trade name.

LCH SA today is a wholly owned subsidiary of LCH Group Holdings Ltd, of which 57.8 per cent of the shares are owned by the London Stock Exchange.

LCH SA has been designated by the Minister of Finance as a system under the EU Settlement Finality Directive as transposed in France under Article L330-1 et seq. of the M&FC.

To reduce the systemic risk posed by derivatives in compliance with G20 commitments relating to clearing standardised OTC derivatives, EMIR was adopted and came into force on 16 August 2012. It lays down clearing and bilateral risk management requirements for OTC derivative contracts, reporting requirements for derivative contracts and uniform requirements for the performance of the activities of CCPs and trade repositories.

LCH SA, under its Rule Book, guarantees performance with regard to its participants. The ACPR assimilates a clearing house to a payment infrastructure.

As mentioned above, Banque Centrale de Compensation is licensed as a bank or credit institution for the purposes of the EU Banking Directive. As such, it is also subject to mandatory reserve obligations under the European Central Bank (ECB) Regulation.

Under the provisions of the M&FC, it is mandatory for a clearing house to be licensed as a credit institution, and this has been confirmed by the Banking Reform.

Being subject to reserve requirements also entitles Banque Centrale de Compensation to ECB money.

Although already subject to EMIR, a CCP is also subject to comprehensive requirements, including in the areas of capital and compliance. These requirements fall short, however, of requiring that a CCP be licensed as a credit institution. Authorisation as a CCP is granted by the competent authority of the Member State in which it is established.

Rating agencies

The French regulatory environment relating to rating agencies is governed by Regulation (EC) No. 1060/2009 on credit rating agencies of 16 September 2009, as modified by Regulation (EU) No. 513/2011 issued on 11 May 2011, which reinforces the direct supervision and control powers limited in the first version (the Rating Regulation).

The Rating Regulation imposes the following duties on rating agencies:

  1. to avoid conflicts of interest and to require an increasingly high degree of independence from stakeholders within the rating process;
  2. to improve rating quality by achieving higher standards in respect of methodology;
  3. to improve governance and internal controls of rating agencies; and
  4. to introduce rules to improve the transparency of the rating process regarding the rated entity as a sine qua non condition to promote public confidence in financial markets.

On 30 May 2012, four Commission delegated regulations establishing regulatory technical standards for credit rating agencies were published. These technical standards set out:

  1. the information to be provided by a credit ratings agency in its application for registration with ESMA;
  2. the presentation of the information to be disclosed by credit rating agencies in a central repository so that investors can compare the performance of credit rating agencies in different rating segments;
  3. how ESMA will assess rating methodologies; and
  4. the information that credit rating agencies must submit to ESMA, and at what time intervals, for it to supervise compliance.

Ratings used either for regulatory purposes or in a prospectus to be used for admission to trading on a regulated market must be issued by credit rating agencies established in the European Community and registered in accordance with the Rating Regulation. A credit agency may, subject to certain conditions, endorse a credit rating issued in another country. Exemptions to endorsement are subject to certain conditions, and credit rating agencies seeking such an exemption must apply for certification.

It was further provided that, by 7 June 2010, each Member State should designate a competent authority for the purpose of the Rating Regulation. The AMF was designated by Law No. 2010/1249 of 22 October 2010 as the competent French authority for registration and supervision of credit rating agencies.

Key provisions of Regulation (EU) No. 462/2013 of the European Parliament and of the Council of 21 May 2013, amending Regulation (EC) No. 1060/2009 on credit rating agencies, stipulate that:

  1. ratings will be published on a European rating platform;
  2. ratings of sovereign bonds will be limited and made more transparent;
  3. financial institutions will have to strengthen their own credit risk assessment; and
  4. the risk of conflicts of interest will be mitigated.

Until recently, French law provided a specific liability regime for credit rating agencies that was distinct from the one provided in the EU regulations. However, this regime was abrogated by Law No. 2018/727, of 10 August 2018, to align French legislation with EU law.

As a result of the economic crisis and of the EU legal framework governing rating agencies, the three agencies dominating the French rating market (Moody's, Standard & Poor's and Fitch) have reorganised their structures, which has reinforced their supervisory activity. The rating agencies in France had already substantially modified their methodology relating to bonds in 2009 so that estimated liquidity risk could be taken into account and addressed.

Outlook and conclusions

The French financial system has emerged stronger from the turmoil of 2007 to 2009, although a few institutions have been subject to severe stress.

The focus on universal banking, combining a robust retail banking sector (which benefits from strong shareholder support) with corporate investment banking activities operating in a well-established regulatory and supervisory environment, has been at the root of France's ability to overcome the severe difficulties and substantial losses of the past few years.

The events of the past 10 years have shown that remedies for a global crisis lie in global (and regional) actions. The need to improve the supervisory framework at the EU level, in close coordination with Member States, has become compelling. The adoption, therefore, of Basel III measures has constituted a particular challenge in the context of strengthening regulatory capital levels. The entry into force of CRD IV and CRR was expected to strengthen the trend towards disintermediation, together with enhanced recourse to capital market instruments and securitisation.

The long-awaited creation of pan-European supervision authorities, including the European Banking Authority, ESMA and the European Insurance and Occupational Pensions Authority, has helped address the compelling need for supervision at European level. However, it also appears that in a post-Brexit context, it is time to streamline the governance framework at the EU level, and in this respect the European Commission made a legislative proposal to review the European Supervisory Authorities. This was supported by the AMF in a position paper of February 2018, in which it proposed a few adjustments to the proposal to enhance harmonisation across the European Union, a supervisory convergence and uniform interpretation of the European regulations.

An outlook on the near future for capital markets has been provided by the AMF in a recent report on the markets and the risk outlook for 2020, with the following trends highlighted in the context of the covid-19 health crisis.

The economic shock induced by the health crisis is testing the financial sector's strength. This sector has been very resilient so far, largely thanks to massive intervention and support from the authorities. The covid-19 outbreak triggered an unprecedented macroeconomic shock worldwide, affecting both supply capacity and demand. The repercussions for financial markets constitute a shock of a more severe nature than most of the stress tests imagined previously, and this coincides with additional operational problems (unavailability of workplaces, reduced capacity for communication, etc.)

The financial sector's resilience has, however, been demonstrated by the orderly functioning of contingency plans and the fact that there has been no sign of systemic risk. Accordingly, market infrastructures have remained open, receiving – albeit with high levels of volatility – record volumes of equity trades (a peak of €11 billion daily on Euronext Paris – triple the usual volume), while the level of liquidity on some fixed income markets has deteriorated.

Investment funds, for their part, have faced some very large redemption requests, and liquidity management tools – which are all available in France – have demonstrated their usefulness.

However, the profound financial imbalances that were already present at the time of the shock have been exacerbated by the covid-19 crisis and the risk of a market correction, excessive debt, political tensions or a disorderly Brexit remain the key vulnerabilities.

Footnotes

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