French Business Law - French Legislation

Article L211-27 of the French Monetary and Financial Code

November 8, 2023

A repurchase agreement is a transaction whereby a legal entity, a unit trust, a real estate investment trust, a professional real estate investment trust, a specialised financing fund or a securitisation fund transfers full ownership of financial securities to another legal entity, a unit trust, a real estate investment trust, a professional real estate investment trust or a securitisation fund for an agreed price, to another legal entity, a fonds…

Article L211-28 of the French Monetary and Financial Code

November 8, 2023

The repurchase agreement relates to financial securities which are not likely to be the subject, throughout the duration of the transaction, of : 1. The detachment of a dividend entitlement, giving entitlement to the tax credit provided for in b of 1 of article 220 of the General Tax Code; 2. The payment of interest subject to the withholding tax provided for in article 119 bis (1) or article 1678…

Article L211-29 of the French Monetary and Financial Code

November 8, 2023

The repurchase agreement becomes enforceable against third parties as soon as the financial securities are delivered, the terms of which are set by decree.

Article L211-30 of the French Monetary and Financial Code

November 8, 2023

If the transferor defaults on its obligation to pay the transfer price, the securities remain the property of the transferee. If the transferee defaults on its obligation to transfer the securities, the transfer price remains the property of the transferor.

Article L211-31 of the French Monetary and Financial Code

November 8, 2023

The assignee’s remuneration, in whatever form, constitutes income from a debt. For accounting purposes, it is treated as interest. When the term of the repurchase agreement covers the date of payment of the income attached to the financial securities sold under the repurchase agreement, the transferee pays it to the transferor, who records it as income of the same nature.

Article L211-32 of the French Monetary and Financial Code

November 8, 2023

Under a repurchase agreement, the seller retains the securities sold under a repurchase agreement as an asset on its balance sheet and records the amount of its debt to the buyer as a liability on its balance sheet; these securities and this debt are recorded under a specific heading in the seller’s accounts. In addition, the amount of the financial securities sold under a repurchase agreement, broken down according to…

Article L211-33 of the French Monetary and Financial Code

November 8, 2023

Financial securities received under a repurchase agreement are not recorded on the transferee’s balance sheet; the transferee records the amount of its receivable from the transferor as an asset. When the transferee disposes of financial securities that it has itself received under a repurchase agreement, it recognises as a liability on its balance sheet the amount of this disposal representing its financial securities debt which, at the end of the…

Article L211-34 of the French Monetary and Financial Code

November 8, 2023

For the purposes of articles L. 211-27 to L. 211-33, public or private bills are treated in the same way as financial securities. However, only credit institutions and finance companies may repurchase or reverse repurchase private bills.

Article L211-35 of the French Monetary and Financial Code

November 8, 2023

No one may, in order to avoid obligations arising from financial contracts, rely on article 1965 of the Civil Code, even if these transactions are resolved by the payment of a simple difference.

Article L211-36 of the French Monetary and Financial Code

November 8, 2023

I. – The provisions of this paragraph apply to 1° To financial obligations arising from transactions in financial instruments or in units mentioned in article L. 229-7 of the Environment Code, spot foreign exchange transactions or transactions for the sale, purchase or delivery of gold, silver, platinum, palladium or other precious metals or to goods represented by a storage receipt mentioned in article L. 522-37-1 of the French Commercial Code,…

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Legislative part

Article L211-27 of the French Monetary and Financial Code

Article L211-28 of the French Monetary and Financial Code

Article L211-29 of the French Monetary and Financial Code

Article L211-30 of the French Monetary and Financial Code

Article L211-31 of the French Monetary and Financial Code

Article L211-32 of the French Monetary and Financial Code

Article L211-33 of the French Monetary and Financial Code

Article L211-34 of the French Monetary and Financial Code

Article L211-35 of the French Monetary and Financial Code

Article L211-36 of the French Monetary and Financial Code

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Legislative part

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