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

Company Law (en cours)

Article L. 211-9 of the Monetary and Financial Code requires the account holder-custodian to safeguard the rights of account holders over the financial securities registered therein. Pursuant to Article 322-7 of the AMF General Regulation, they must exercise all due care in implementing all securities and cash movements requested by their clients and in preserving the financial securities, ensurin …

Principle

Article L. 211-9 of the Monetary and Financial Code requires the account holder-custodian to safeguard the rights of account holders over the financial securities registered therein. Pursuant to Article 322-7 of the AMF General Regulation, they must exercise all due care in implementing all securities and cash movements requested by their clients and in preserving the financial securities, ensuring the strict accounting of these securities and their movements in compliance with the applicable procedures. They are also required to facilitate the exercise of the rights attached to these financial securities, in accordance with the applicable regulations, and to ensure that their clients' assets are distinguished from their own assets in the books of third parties with whom they hold the corresponding assets .

Furthermore, the custody account-keeper cannot use the financial securities registered in the account and the rights attached to them, nor transfer their ownership without the express consent of their holder . Therefore, the classification of breach of trust, which can apply to the misappropriation of dematerialized securities, is established when the custodian performs acts of disposition on the securities received in deposit, without the consent of their holder, resulting in a change of possession . Moreover, a bank that has taken the initiative to sell its client's securities by accepting a public exchange offer of shares on their behalf cannot invoke the management of affairs by arguing the alleged utility of the alienation of the securities, without also establishing that its client could not reasonably act on their own, nor characterizing the severity of the risks that maintaining the situation could have posed . Conversely, without abusing its rights vis-à-vis its client-depositors, a bank may sell its own securities massively, at the risk of causing a drop in the share price, as long as it is not required, in the management of its assets, to account to its clientele, nor to consult other shareholders prior to a potential sale .

Finally, Article 322-7, 5° of the AMF General Regulation requires the custodian to return as soon as possible the financial securities that are registered in securities accounts in its books. Consequently, a custodian tasked with safeguarding the assets of a UCITS under its custody is obliged, under all circumstances, even if it entrusts sub-custody to a third party, to immediately return these assets, pursuant to mandatory public policy provisions intended to ensure the protection of savings and the proper functioning of financial markets .

On the other hand, unless otherwise agreed, the investment service provider holding a securities account is not required, in the absence of speculative operations, to warn its client against the risk of losses inherent in the fluctuation of the financial securities' prices subject to the sale orders initiated by the client . Similarly, the obligation to communicate in writing to the client three months before the intended application date any modification of the pricing conditions applicable to a bank account does not apply to financial instrument accounts .

Pursuant to Article L. 211-10 of the Monetary and Financial Code, in the event of the commencement of reorganization or judicial liquidation proceedings for an authorized intermediary, the judicial administrator or liquidator, jointly with the provisional administrator or liquidator appointed, if applicable, by the Prudential Supervision and Resolution Authority, verifies that all financial securities recorded in an account with a central depository or another intermediary in the name of the defaulting intermediary, regardless of the nature of the accounts opened with them, are sufficient in number for the intermediary to fulfill its obligations to account holders. In the event of an insufficiency in the number of these securities, a proportional distribution is carried out security by security among the affected account holders. They may transfer the securities they recover to a securities account held by another intermediary or by the issuer. Furthermore, no seizure, even conservatory, is permitted on accounts opened with a central depository . Similarly, no enforcement or conservatory measure against an authorized intermediary is permitted on the financial securities recorded in an account opened in its name in the books of another intermediary when they are not the property of the first intermediary .

RGAMF (AMF General Regulation), Art. 322-7.

Cass. crim., 30 May 1996, LawLex202200011407JBJ.

Cass. com., 12 January 1999, LawLex202200011310JBJ.

Cass. com., 19 February 2008, LawLex202200011386JBJ.

Cass. com., 4 May 2010, LawLex202200011388JBJ.

Cass. com., 12 June 2012, LawLex202200011387JBJ.

Cass. com., 6 July 2010, LawLex202300005881JBJ.

Company Law (en cours)

73. Principle

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73. Principle

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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