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

Company Law (en cours)

For the recognition of the regulated market, the market undertaking must establish market rules, which must be transparent and non-discretionary. These rules must ensure fair and orderly trading and set objective criteria for the efficient execution of orders as well as the conditions for the admission of members in accordance with the provisions of Article L. 421-17 of the Monetary and Financial  …

Principle

For the recognition of the regulated market, the market undertaking must establish market rules, which must be transparent and non-discretionary. These rules must ensure fair and orderly trading and set objective criteria for the efficient execution of orders as well as the conditions for the admission of members in accordance with the provisions of Article L. 421-17 of the Monetary and Financial Code . They must also determine the conditions for market access and admission to trading of financial instruments and assets stated in part II of Article L. 421-1, the provisions for the organization of transactions, the conditions for the suspension of trading of one or more financial instruments and assets also referred to in part II, and the provisions relating to the recording and publicity of trades . The rules are approved by the Financial Markets Authority, which verifies their compliance with applicable legislative and regulatory provisions, as well as their proportionality to the objectives pursued . Any proposed modification of the rules established by the market undertaking must be notified to the Financial Markets Authority for approval . Finally, these rules must be drafted in French  and published by the market undertaking .

In accordance with Article L. 421-11 of the Monetary and Financial Code, the market undertaking is required to take the necessary measures to detect, prevent, and manage potentially harmful effects, for the proper functioning of the regulated market or for its members, of any conflict of interest between the requirements for the proper functioning of the regulated market it manages and its own interests or those of its shareholders. It must permanently have the means, organization, and adequate monitoring procedures to identify significant risks that could compromise the proper functioning of the regulated market it manages and take appropriate measures to mitigate these risks. It must adopt ethical rules applicable to the members of the administrative, management, and supervisory bodies, as well as to executives, employees, and agents, and ensure compliance with them. It must guarantee the proper functioning of the technical trading systems and have emergency procedures in place to address potential malfunctions, and implement mechanisms to facilitate the efficient and timely settlement of transactions executed within their systems. Additionally, the market undertaking is required to have, at the time of the recognition of the regulated market and permanently, sufficient financial resources to ensure the proper functioning of the market . Furthermore, it may authorize its members to designate a settlement and delivery system for transactions on financial instruments concluded on the regulated market it manages, subject to the establishment of arrangements and links between the settlement and delivery system for financial instruments and any other necessary system or infrastructure to ensure the efficient and economical settlement of these transactions, and confirmation by the Financial Markets Authority that the technical conditions for the settlement and delivery of financial instruments within the framework of transactions concluded on this regulated market by another settlement and delivery system for financial instruments other than that designated by the market undertaking are such as to allow the smooth and orderly functioning of financial markets .

The market undertaking Euronext cannot, to justify a breach of its obligation to ensure market integrity, argue that it has not itself engaged in any fraudulent behavior or that the exemption from penalties granted to a market member would have contributed to improving market efficiency and liquidity .

According to the Conseil d'Etat, the provisions of Article L. 421-11 of the Monetary and Financial Code, which require the market undertaking to detect, prevent, and manage the potentially harmful effects of any conflict of interest between the requirements for the proper functioning of the regulated market it manages and its own interests or those of its shareholders, define the obligations imposed on it in a sufficiently clear and precise manner, and non-compliance is subject to a sanction .

CMF, Art. L. 421-10, para. 1; Cass. com., 3 March 2015, LawLex202200011443JBJ, considering that the change in the pricing applicable to trading operations, rendered inapplicable by the company Euronext Paris to historical proprietary traders (NCP), does not present a discriminatory character against new NCPs if the seniority criterion used is applied objectively.

CE, 19 May 2017, LawLex202200011477JBJ; AMF, 4 December 2015, LawLex202300001159JBJ, specifying that granting a high-frequency trading (HFT) operator an exemption from the order/transaction ratio, beyond which a financial penalty is applied for any new order placed, outside of any predefined program, in a non-public manner, without consideration, for a duration of sixteen months, is contrary to Euronext's obligation to conduct its activities with neutrality and impartiality, as derived from Articles 512-3 of the AMF General Regulation and L. 421-11, I 1° of the Monetary and Financial Code.

Company Law (en cours)

134. Principle

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134. Principle

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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