All of French Company Law: ordinary law of companies and specific regime for different types of companies

Company Law (en cours)

In accordance with Article L. 621-9 of the Monetary and Financial Code, the Financial Markets Authority conducts controls and investigations to ensure the execution of its market surveillance mission. It ensures, in particular, the regularity of operations carried out on financial instruments when they are subject to a public offer and compliance with the professional obligations imposed by legisl …

Principle

In accordance with Article L. 621-9 of the Monetary and Financial Code, the Financial Markets Authority conducts controls and investigations to ensure the execution of its market surveillance mission. It ensures, in particular, the regularity of operations carried out on financial instruments when they are subject to a public offer and compliance with the professional obligations imposed by legislative and regulatory provisions, notably on investment service providers other than portfolio management companies authorized or operating under the freedom to provide services in France, as well as legal entities under their authority or acting on their behalf, persons authorized to engage in the custody or administration of financial instruments, members of regulated markets who are not investment service providers, or market undertakings. Furthermore, the Financial Markets Authority ensures compliance by these same entities or persons, as well as by individuals under their authority or acting on their behalf, with applicable European regulations.

The procedure for controls and investigations is governed by Articles 142-1 to 144-4 of the AMF's general regulation. To exercise its powers of control and investigation, the AMF may resort  to its staff members, the general secretariat of the Prudential Supervision and Resolution Authority, the central bodies mentioned in Article L. 511-30 , for the institutions affiliated with them, the central depositories mentioned in 3° of II of Article L. 621-9, for the member institutions of these depositories, an authority of another Member State of the European Union or party to the agreement on the European Economic Area responsible for the supervision of financial markets or investment service providers, statutory auditors, chartered accountants, experts listed on a list of judicial experts, and persons or organizations competent in financial studies or advice. Pursuant to 1° of Article L. 621-9-2, the Financial Markets Authority may resort to a market undertaking or a clearinghouse to ensure the supervision of the activity and operations carried out by members of a regulated market or by an investment service provider that has transmitted orders on the market . It may also, pursuant to 3° of Article L. 621-9-2, resort to the associations of financial investment advisors mentioned in Article L. 541-4 to ensure the supervision of their members' activities . In accordance with Article R. 621-32, the AMF ensures that these persons have the necessary capacities and resources for the effective execution of all their missions. The use of these persons, except for its staff members, is part of a memorandum of understanding concluded with the Financial Markets Authority, which outlines the missions to be carried out and specifies the conditions under which they must be executed. The memorandum of understanding includes a clause stipulating that these auxiliaries must act and organize themselves in a manner that avoids any conflict of interest and ensures that the information obtained in the exercise of the missions entrusted to them is used only for the accomplishment of those missions.

On the basis of Article 143-3 of the AMF General Regulation, the Secretary General issues a mission order to the persons he assigns to the control. This order specifies, in particular, the entity or person to be controlled, the identity of the controller, and the purpose of the mission. The date on the investigators' mission order determines the starting point of the period during which breaches are considered but does not prevent the collection of documents prior to this period as long as they are related to the purpose of the investigation . The fact that the investigators' mission order only refers to practices implemented from 1 December 2008 does not prevent them from requesting all relevant documents, even those prior to this date, provided they are related to the facts under investigation and are likely to contribute to the establishment of the truth . Similarly, the AMF Board, which has the power to decide alone on prosecutions based on the factual circumstances submitted to it and to determine the persons it intends to implicate, cannot in any way be limited in advance by the terms of the mission orders that initiated the control .

Investigators and controllers may, for the purposes of the investigation or control, request the communication of all documents, regardless of their medium . They are not required to inform undertakings that they have the right not to communicate the documents requested . During a simple control, the initial reproduction of all electronic mailboxes, followed by the sorting of copied elements to retain only those relevant to the investigation, in the presence of the company's representatives and without any coercion, is considered a delivery of documents, not a seizure subject to prior judicial authorization under Article L. 621-12 of the Monetary and Financial Code .

Pursuant to Article R. 621-34, investigators and controllers may also summon and hear any person likely to provide them with information. They are required to present their nominative mission order issued by the secretary-general in response to any request made within the scope of their investigations. The summons must, if necessary, be sent to the person concerned by registered letter with acknowledgment of receipt, delivered in person against receipt, by bailiff's act, or by any other means ensuring its date of receipt, at least eight days before the date of the summons, refer to the nominative mission order of the investigator or controller, and remind the summoned person that they have the right to be assisted by a counsel of their choice, pursuant to Article L. 621-11. When investigators and controllers wish to hear the person concerned via videoconference or audioconference, the summons must state this, specify that the conference will be recorded, and seek the express consent of the person concerned. The person heard during a hearing does not need to have perfect command of the language in which they are heard but must understand it or, failing that, be assisted by an interpreter . Investigators and controllers may also gather explanations on-site, based on the second paragraph of Article L. 621-10 or Article L. 621-12, provided that the person heard has been expressly informed of the right to be assisted by counsel of their choice and has expressly waived the benefit of the period provided in case of summons.

Finally, investigators can access premises used for professional purposes, even unexpectedly , without judicial authorization, as long as they do not implement any coercive measures.

On the other hand, for the investigation of offenses related to investor protection, such as insider trading, and acts that may be classified as offenses against property and sanctioned by the sanctions commission of the Financial Markets Authority pursuant to Article L. 621-15, the judge of freedoms and detention of the Judicial Court in whose jurisdiction the premises to be visited are located may, upon a reasoned request from the Secretary General of the Financial Markets Authority, authorize by order the authority's investigators to conduct visits to any location and to seize documents and gather explanations from individuals on-site . Although AMF investigators can, in principle, only seize documents related to the prohibited actions specified in the visit and home seizure authorization order, they are not prohibited from seizing documents predating the investigation period as long as they are partially useful in proving the practices in question . The protection of the confidentiality of correspondence between a lawyer and their client applies to AMF investigations, provided that those invoking it can precisely identify the authors or recipients . Regarding the owner of the seizable documents, the Court of Cassation considered that, based on the combination of Articles L. 621-12 of the Monetary and Financial Code and 8 ECHR, only documents and information media belonging to or available to the occupant of the premises, i.e., the person occupying the premises under any title, where the visit was authorized, could be seized, excluding transient individuals at the time of the home visit, even if their presence was expected . The Plenary Assembly later revised this solution and now considers that documents and information media related to the investigation's purpose and located in the places designated by the judge or accessible from them are seizable, without the need for these documents and media to belong to or be available to the occupant of the premises . This solution is based on the fact that Article L. 621-12 of the Monetary and Financial Code, which pursues a legitimate aim, namely the protection of investors, regulation, and transparency of financial markets, is necessary in a democratic society to achieve this objective. According to the Court of Cassation, the solution does not excessively infringe on the right of any person to respect for their private and family life, home, and correspondence. On the one hand, the visit and seizure operations have been previously authorized by a judge who ensured the validity of the request, are conducted under their authority and control, in the presence of a judicial police officer responsible for keeping them informed of the proceedings, and the occupant of the premises or their representative, who reviews the documents before their seizure; they can only occur in the premises designated by the judge, and the occupant of the premises and the individuals targeted by the order are informed, through notification, of their right to call upon a lawyer of their choice, and these operations can be contested before the first president of the court of appeal by all individuals from whom such seizures were made. On the other hand, only elements necessary for the investigation of the aforementioned offenses can be seized, and those not useful for revealing the truth must be returned.

Controlled persons are required to assist investigators with diligence and loyalty. The offense of obstruction, provided by law and defined in Article L. 621-15, II, f) of the Monetary and Financial Code, which penalizes the failure to respond to this right of communication, aims to give effective power to the control powers entrusted to AMF agents, which serve the legitimate purpose of protecting financial public order and investor security . An operator obstructs the proper conduct of the AMF's control mission when they refuse to communicate the entirety of their general ledgers for the required years, on the grounds that such a request would be neither necessary nor legitimate .

Pursuant to Article R. 621-35, the reports prepared in the context of investigations or inspections state the nature, date, and place of the findings made. They are signed by the investigator or inspector and the person concerned by the investigations. In case of refusal by the latter, this is noted in the report. When investigators or inspectors gather explanations on-site, a report separate from the visit report is drawn up. This report states that the person heard was informed of their right to be assisted by counsel of their choice and that they waived the benefit of the time limit provided in case of summons. When investigators or inspectors have heard the person concerned via a videoconference or audioconference system, the audiovisual or sound recording resulting from these operations is transcribed in a report submitted for signature to the person concerned. For this purpose, this report, accompanied by the recording, is sent to them within one month from the date of the videoconference or audioconference. When investigators or inspectors use an assumed identity as defined in Article L. 621-10-1 to consult a website on which the persons and entities mentioned in II of Article L. 621-9 provide their services, they draw up a report on the methods of consultation and use of this site, the responses obtained, and their findings. The pages of the site consulted are annexed to it. This report is sent to the person or entity concerned before the end of the investigation or inspection. No text or principle prohibits the director of investigations and market surveillance from collecting, after the closure of the investigation and instruction, in a "voluntary hearing report," the statements of a former member of the company, and then transmitting this document to the chairman of the sanctions commission, who, in the current state of the procedure, is responsible for assessing, in compliance with the principle of adversarial proceedings and the rights of the defense, the follow-up to this approach . Finally, when obstacles have been placed in the way of the proper conduct of AMF inspections, this is noted in the inspection report or in a specific report detailing these difficulties .

Under which are considered as central bodies: Crédit Agricole S.A., the central body of savings banks and popular banks, the Confédération Nationale du Crédit Mutuel.

Cons. d'Et., 15 May 2013, LawLex202300000631JBJ, considering that no legislative or regulatory provision prohibits the investigators of the AMF from conducting an unannounced on-site inspection in the professional premises of the entities or persons mentioned in II of Article L. 621-9 of the Monetary and Financial Code, that is, without prior notice to the person being inspected.

CMF, Art. L. 621-12, para. 1 - See, for an application, Cass. com., 4 November 2020, LawLex202200009354JBJ, specifying that the home visits and seizures provided for by Article L. 621-12 of the Monetary and Financial Code are not subsidiary in nature compared to other measures available to AMF agents, so they can be conducted immediately without violating the principle of proportionality.

Cass. com., 4 November 2020, LawLex202200009354JBJ.

Cass. com., 14 October 2020, LawLex202200009355JBJ and LawLex202200009778JBJ.

Cass. ass. plén., 16 December 2022, LawLex202300000281JBJ and LawLex202300000282JBJ.

Paris, 16 February 2021, LawLex202300000025JBJ, considering that the provisions of Article L. 621-15, II, f) of the Monetary and Financial Code, which target "any person" who refuses to communicate a document when this document is requested in the context of an investigation or control, apply not only to the regulated person but also to any third party.

Paris, 16 February 2021, LawLex202300000025JBJ.

Cass. com., 27 May 2015, LawLex202300006337JBJ, approving CA Paris, 31 May 2012, LawLex202300000527JBJ.

Cass. com., 9 January 2019, LawLex202200009353JBJ.

AMF, 28 October 2019, LawLex202300000630JBJ.

CMF, Art. L. 621-10, para. 1. - See, for an application, Cass. com., 9 January 2019, LawLex202200009353JBJ, holding that the exercise of this right does not violate the right not to self-incriminate as it aims not at obtaining the confession of the person being audited, but at obtaining documents necessary for the conduct of the AMF's investigation; AMF, 5 June 2013, LawLex202300000591JBJ, specifying that the request for communication of documents provided for by Article L. 621-10 of the Monetary and Financial Code may be used instead of a domiciliary visit even if the facts sought are likely to receive a criminal classification; Paris, 16 February 2021, LawLex202300000025JBJ, affirming that the AMF's control of the existence and management of potential conflict of interest situations implies that auditors can verify co-investments, transactions, and business relationships between group companies or their subsidiaries and the regulated company, without being opposed by the absence of necessity for the requests for communication of the corresponding documents.

Company Law (en cours)

164. Principle

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164. Principle

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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