The ACPR's powers and sanctions: What you need to know

The Autorité de contrôle prudentiel et de résolution (ACPR) plays a central role in ensuring the stability of the banking and insurance sectors in France.. Understanding the scope of its powers, from preventive measures to disciplinary sanctions, is essential for the entities it supervises.. This article sets out the ACPR's prerogatives, explaining the mechanisms it uses to fulfil its mission of protecting customers and safeguarding financial stability..  

The ACPR's limited power to set standards

Unlike some other regulatory authorities, the ACPR does not have autonomous general regulatory powers.. Its standard-setting capabilities are limited and mainly focused on the technical application and interpretation of existing texts..  

No general regulatory power

The ACPR does not have the power to issue general administrative regulations in the banking and financial sector.. Historically, this prerogative was entrusted to other bodies, and since the Financial Security Act of 2003, it has mainly been the responsibility of the Minister for the Economy.. The ACPR is therefore more of a supervisory authority than a regulatory authority in the strict sense, since it does not create the primary regulations that it is responsible for enforcing..  

Regulatory competence of the Minister for the Economy

The Minister for the Economy holds the main regulatory power for the banking and financial sectors, which he exercises by means of decrees.. Its remit covers a wide range of areas defined by the Monetary and Financial Code, from prudential rules and management standards to market access conditions and customer relations.. The Minister may also approve professional codes of conduct, which then become mandatory for players in the sector concerned.. The ACPR's involvement in this process is mainly through advisory or technical opinions, but it does not steer the development of these general standards..  

Residual standard-setting prerogatives: soft law and technical rules

Despite its lack of general regulatory powers, the ACPR is not totally devoid of standard-setting capabilities. It mainly uses "soft law" instruments and technical rules to guide the practices of professionals and ensure that legislation is properly applied..  

Soft law (positions, recommendations, Q&A)

The ACPR produces various documents which, although not legally binding in the strict sense, have a significant influence on the behaviour of supervised entities. These acts fall under the heading of flexible law and are intended to clarify the interpretation of the applicable rules or to promote good practice.. These include :  

• The positions They express the ACPR's interpretation of a specific point in the regulations, often in anticipation of questions from professionals.  
• Recommendations Recommendations: These define the rules of good practice, particularly in the areas of customer protection and product marketing. The ACPR has published a large number of recommendations in various areas such as loan insurance, savings account advertising and complaints handling.  
• Questions and answers (Q&A) The answers to frequently asked questions about the application of the regulations.  
• Notices and guidelines They help with prudential supervision by clarifying legislation, particularly in terms of the fight against money laundering and the financing of terrorism.  

Although these actions cannot be used directly as a basis for a penalty, failure to comply with them can be taken into account during inspections.. Furthermore, the recent case law of the Conseil d'État recognises that certain acts of flexible law may be the subject of an action for ultra vires if they are likely to produce significant effects or significantly influence behaviour..  

Technical rules (instructions) and code approval

The ACPR has derived technical regulatory powers, in particular to define the terms and conditions of its own supervision.. It can therefore issue instructions which specify the list, model, frequency and deadlines for the transmission of documents and information that the audited entities must periodically provide to it (documentary audit). These instructions are binding regulatory acts.  

In addition, the ACPR may approve (and not approve, which is reserved for the Minister) codes of conduct drawn up by professional associations. Approval makes the provisions of the code binding on the members of the applicant association, after the ACPR has checked that they comply with the laws and regulations.. This procedure differs from ministerial approval, which makes the code applicable to the entire sector.. To find out more about status of the ACPRFor more information, see our dedicated article.  

The ACPR's supervisory powers

The ACPR's main mission is to supervise the banking, financial (in part) and insurance sectors.. This supervision is exercised through several major prerogatives: the power of authorisation, ongoing surveillance and administrative police measures.  

The power of authorisation : Access to the banking, financial and insurance markets

Access to regulated activities is conditional on obtaining a licence issued by the ACPR, sometimes in collaboration with other authorities such as the European Central Bank (ECB) or the Autorité des Marchés Financiers (AMF).. This approval is a barrier to entry designed to guarantee the financial soundness, appropriate organisation and competence of the managers of companies operating in these sensitive markets..  

Banking authorisation (credit institutions, finance companies, etc.)

Authorisation is required to carry out banking transactions (receiving funds from the public, credit transactions) on a regular basis.. Historically the responsibility of national authorities merged within the ACPR, the power to authorise lending institutions established in the eurozone has largely been transferred to the ECB under the Single Supervisory Mechanism (SSM) since 2014.  

However, the ACPR retains an important role: it instructed applications for authorisation from French credit institutions, verifies compliance with national and European requirements, and sends a draft decision to the ECB. It may refuse approval directly if the conditions under national law are not met. The ACPR also remains competent to approve branches establishments from non-EU/EEA countries. It is also the licensing authority for finance companiesthe payment institutions and electronic money institutions.  

Approval is granted subject to verification of a number of conditions: minimum capital, appropriate corporate form, sound governance (effective "four-eyes" management, internal control, risk management), good repute and competence of managers, solidity of capital providers, viable business programme, etc.. The ACPR (or the ECB on a proposal from the ACPR) may attach special conditions to the authorisation or restrict it to certain transactions..  

Financial authorisation (ISPs, central counterparties, etc.)

For the Investment Services Providers (ISPs)authorisation is the responsibility of the ACPR, but the procedure involves a prior opinion of the AMF on the programme of activities. The ACPR makes the final decision, but the AMF's opinion is an essential component of this "complex operation"..  

Since the PACTE Act, the ACPR has also become the competent authority for approving central counterparties (clearing houses), whether or not they have opted for credit institution status. This authority is justified by the systemic role of these infrastructures and the need for rigorous prudential supervision, again after consulting the AMF and the Banque de France..  

Approval of insurance companies

Approval is also required to carry on insurance or reinsurance business.. The system, harmonised at European level (Solvency II), operates by insurance "classes" (life, non-life), with incompatibilities between certain classes.. The ACPR is the competent authority for authorising companies with their head office in France.. For companies from the European Economic Area operating in France under the "European passport", a simple notification to the ACPR is sufficient (freedom of establishment or freedom to provide services).. Swiss and non-European companies must set up a branch in France and obtain specific authorisation from the ACPR, sometimes twice, with requirements such as the appointment of a general representative.. As with banks, the conditions for authorisation relate to legal form, financial resources (own funds), organisation, governance and the good repute of directors..  

Merger registers and notifications

The ACPR maintains and publishes registers of authorised entities and intermediaries (such as Regafi for financial agents) for public information.. In addition, the Autorité de la concurrence must obtain the opinion of the ACPR when examining a merger involving a supervised entity, in order to assess the potential prudential impact..  

Ongoing monitoring of controlled companies

Once authorisation has been obtained, the ACPR carries out ongoing supervision of the entities under its remit.. The purpose of this supervision is to ensure ongoing compliance with legal and regulatory requirements, particularly in terms of solvency, liquidity, governance, internal control and customer protection..  

Residual powers in relation to the Single Oversight Mechanism (SOM)

As with authorisation, the ACPR's supervisory powers in the banking sector are affected by the ESM.. La ECB directly supervises credit institutions deemed to be 'significant' (according to criteria of size or systemic importance). The ACPR retains direct supervision of "less significant" institutions and participates in the ESM as the competent national authority, often acting under delegation or in collaboration with the ECB.. For insurance companies and most investment firms (excluding ECIs), the ACPR remains the main supervisory authority.. Recently, certain large systemic investment firms ("class 1") have been reclassified as "credit and investment institutions" (CIIs) and are now subject to banking requirements and potentially to direct supervision by the ECB.. The other classes of investment firm remain under the supervision of the ACPR.  

Inspection procedures: documentary evidence and on-site inspection

The ACPR carries out its supervision in two main ways, generally initiated by the Secretary General of the ACPR:  

• Documentary inspection Permanent control: This is a permanent control based on the analysis of documents and information that entities must periodically send to the ACPR (accounting statements, prudential statements, reports, etc.) according to formats and deadlines defined by the ACPR's instructions. The ACPR may request additional documents, clarifications or justifications. This control may extend to subsidiaries, parent companies or external service providers.  
• On-site inspections The ACPR (or other partner authorities) will visit the premises of the supervised entity (and potentially its subsidiaries, parent companies, etc.) to carry out on-site inspections of operations, organisation and information systems and to obtain any documents or explanations. This audit may be general or thematic. An Audit Charter, a flexible legal document, sets out the rights and obligations of auditors and auditees during such audits.  

Controllers' powers and Control Charter

The auditors authorised by the Secretary General have extensive powers to carry out their duties.:  

• Right of access business premises during opening hours.  
• Communication rights any document, book, register, contract, accounting document, on any medium, including access to computer systems.  
• Right to summons and hearing any person (manager, employee, third party) whose testimony is deemed necessary.  
• Possibility of investigating online services using an assumed identity.  

The audited entity has a duty to cooperate. Refusal to cooperate or the provision of inaccurate information may result in disciplinary or even criminal sanctions (offence of obstruction)..  

At the end of the inspection, a report is drawn up jointly with the audited entity (unless an emergency justifies an official report). The report can lead to a number of different outcomes: no breach, an administrative police measure, the initiation of sanction proceedings, or referral to the public prosecutor if criminal offences are suspected.. The confidentiality of the report is the rule, except in the case of legal exceptions (transmission to company bodies, statutory auditors, parent company).. For a overview of the ACPRFor more details, see our dedicated article.  

Administrative police measures

When supervision reveals shortcomings, risks or compromised situations, the ACPR has an arsenal of administrative police measures at its disposal to remedy the situation.. These measures, which are distinct from disciplinary sanctions, are intended to prevent or correct a situation that is dangerous for the entity itself, its customers or the stability of the system.. These decisions are generally taken by the supervisory board after an adversarial procedure (except in emergencies) and may be appealed to the Conseil d'État..  

Injunctions (financial, cooperation) and penalty payments

The ACPR may order an entity to take specific measures within a given timeframe.

• Financial injunctions Requirement to restore or strengthen the financial position (capital), liquidity, improve management or organisation to prevent a future breach of prudential obligations. This may include allocating profits to equity capital or limiting variable remuneration.  
• Cooperation orders In the event of non-compliance with obligations to provide information or documents requested during inspections, the ACPR may order the entity to comply, subject to a fine of on-call duty a daily penalty of up to €15,000. The penalty is calculated by the College on the basis of the entity's behaviour.  

Warnings and formal notices

• Caution (formerly warning) When an entity's practices are likely to jeopardise the interests of its customers, the ACPR can warn it to cease those practices immediately.  
• Formal notice The ACPR can require an entity to comply with specific measures within a set timeframe.  

Recovery programme

If the financial situation, management or organisation of an entity appears to be compromised, the ACPR may require it to draw up and implement a recovery programme.. This programme, which is separate from the preventive recovery plan required for certain large entities, sets out the internal measures for rectifying the situation. It must be submitted to the ACPR within one month and its implementation is monitored by a designated auditor.. Refusal to draw up or implement this programme is subject to penalties..  

Precautionary measures (special surveillance, restrictions, suspension of assets, dismissal of directors, etc.)

If the solvency, liquidity or interests of customers are compromised or are likely to be compromised, the ACPR may take more intrusive protective measures.. The list, set out in Article L. 612-33 of the Monetary and Financial Code, includes in particular:  

• Place the entity under special surveillance with enhanced information transmission.  
• Temporary restrictions or bans certain transactions or activities (including accepting deposits or distributing dividends).  
• Suspend or restrict the free disposal of all or part of the assets.  
• Order the automatic transfer a portfolio of insurance policies (subject to strict conditions following a decision by the French Constitutional Council). The transfer of loans or deposits, although provided for in the text, raises similar questions of constitutionality.  
• Suspension or revocation ex officio one or more directors or members of the supervisory bodies.  

Appointment of a provisional administrator

When normal management is no longer assured (for example, following the suspension of managers or at the request of the managers themselves), the ACPR may appoint a provisional administrator.. The latter then exercises all the powers of administration, management and representation of the legal entity, suspending the powers (and remuneration) of the directors in place, but without formally dismissing them.. Their assignment is temporary (maximum 1 year, unless extended) and their remuneration is paid by the audited entity..  

Withdrawal of approval

Withdrawal of authorisation may take place as a police measure (as distinct from a disciplinary sanction), particularly if the entity is no longer carrying out its activity, no longer meets the conditions for authorisation, or has obtained it fraudulently.. For credit institutions covered by the ESM, the withdrawal is decided by the ECB, on a proposal from the ACPR.. For other entities (finance companies, ISPs, insurance companies, branches in third countries), the ACPR retains decision-making powers.. The withdrawal may be total or partial, immediate or deferred, and generally leads to the liquidation of the entity..  

Early intervention measures

Introduced by the BRRD, these measures enable the ACPR to act very quickly in the event of a sudden deterioration in the financial situation or liquidity of an institution (credit, investment, financing) that could lead to an imminent breach of prudential requirements.. The aim is to prevent failure and resolve. They are taken by the supervisory board and may include:  

• Demand the implementation (in whole or in part) of the preventive recovery plan.  
• Demand a debt restructuring plan with creditors.  
• Terminating the duties of directors deemed unfit.  
• Impose changes in business strategy or structure legal/operational.  
• Impose the calling a general meeting with a set agenda.  

The adoption of these measures signals a critical situation and the resolution college is informed, which can anticipate a possible resolution procedure..  

Crisis prevention and resolution powers

In addition to day-to-day supervision, the ACPR (in conjunction with the European authorities) has specific powers to prevent and manage major banking and insurance crises.. These mechanisms are designed to deal with the failure of major institutions without massive recourse to public funds ("bail-out") and by limiting the systemic risk..  

Objective: Avoid bail-outs and manage systemic risk

The 2008 financial crisis highlighted the limitations of traditional bankruptcy procedures for large financial institutions.. Their failure can paralyse the financial system and require costly public bailouts, creating moral hazard ("too big to fail").. The resolution framework aims to reverse this logic by organising an orderly treatment of failures, making shareholders and creditors bear the losses first ("bail-in") rather than taxpayers.. The main objectives are to ensure the continuity of the institution's critical functions, to avoid systemic contagion, to protect depositors and policyholders, and to preserve public finances..  

Preventive treatment (supervisory college)

Before a crisis breaks out, preventive measures are put in place, mainly under the responsibility of the supervisory board..  

Preventive recovery plan

The largest institutions (based on size or systemic importance, in particular those directly supervised by the ECB) must draw up and keep up to date an preventive recovery plan. This plan, prepared by the institution itself and approved by its management bodies, details the internal measures it would take to turn around its situation in the event of a significant financial deterioration, without relying on public aid.. It must consider various crisis scenarios and identify options for restoring viability (disposal of assets, capital increase, risk reduction, etc.).. The ACPR (or the competent supervisory authority for groups) assesses this plan, verifies its credibility and operability, and may require modifications or even impose measures if the plan is deemed insufficient.. For cross-border groups, the assessment is carried out in coordination with the other authorities concerned.  

Preventive resolution plan (drawn up by the resolution college)

Alongside the recovery plan prepared by the company, theresolution authority (the ACPR's Collège de Résolution for entities under national jurisdiction, or the Conseil de Résolution Unique - CRU - for those under the MRU) draws up a preventive resolution plan. This plan is not drawn up by the company, but by the authority, on the basis of information provided by the company.. It anticipates the resolution strategies and tools that could be used if the institution were to fail (sale of activities, bridge institution, bail-in, etc.).. The development of this plan includes a assessment of resolvability of the institution, i.e. its ability to be wound down or resolved in an orderly manner without causing major systemic disruption. If obstacles to solvency are identified, the authority may require the institution to take measures to remove them (simplification of structure, disposal of specific activities, etc.)..  

Early intervention measures (reminder)

As we saw earlier, early intervention measures (activation of the recovery plan, debt restructuring, dismissal of directors, etc.) are the last step before resolution, when default becomes an imminent threat.. They are still the responsibility of the supervisory board..  

Resolution (College of Resolution / CRU)

When the failure of an institution is proven or foreseeable and no alternative measure (private or early supervision) can prevent it, the resolution procedure may be triggered.. It is carried out by the competent resolution authority: the resolution college of the ACPR or the CRU..  

Conditions of opening: Confirmed or foreseeable default

Entry into resolution is subject to strict conditions:  

1. The establishment must be proven or foreseeable failure. Insolvency is defined broadly as failure to comply with the conditions for authorisation, current or imminent inability to pay debts, need for exceptional public financial support (excluding certain specific forms of aid), or a negative net position (assets less than liabilities). For groups, insolvency can be assessed at consolidated level.  
2. There must be no no reasonable prospect that other measures (private or supervisory) can prevent the failure within a reasonable time.  
3. A resolution measure must be judged necessary in the public interestIn other words, a traditional judicial liquidation would not be as effective in achieving the objectives of resolution (continuity of critical functions, financial stability, protection of customers and public funds).  

The decision to initiate proceedings is taken by the resolution authority, often at the request of the supervisor (ACPR or ECB) or the Treasury..  

Relationship with the Single Resolution Mechanism (SRM)

For banks and certain investment firms in the eurozone (and voluntary associated countries), the MRU plays a central role. Le Single Resolution Council (CRU)based in Brussels, is the direct resolution authority for the largest banking groups (those directly supervised by the ECB) and for any resolution involving the Single Resolution Fund (SRF).. For the other ("less significant") banks, theACPR (via its resolution college) remains the national resolution authority, but the CRU may decide to exercise jurisdiction directly if it considers this necessary to ensure consistent application of the rules.. In all cases, even when the CRU decides, the ACPR implements the measures on French territory.. The insurance sector is not covered by the MRU; resolution remains national under the aegis of the ACPR..  

Resolution measures: Divestment of activities, bridge institution, bail-in, etc.

The resolution authority has a toolbox for managing default:  

• Sale of business Forced transfer of shares, assets, liabilities or business lines from the failing institution to a solvent private buyer. The transfer may be total or partial, permanent or temporary, and is carried out at market price (except in emergencies) while protecting the buyer from claims relating to liabilities not transferred. The contracts transferred continue without the co-contractors being able to object to them solely because of the transfer.  
• Bridge institution Creation of a new entity (often publicly owned or controlled by the authorities) to which the sound assets or critical functions of the failing institution are transferred. The aim is to ensure the continuity of essential services while a lasting solution is found (sale to a third party, orderly liquidation). The bridge facility has a limited lifespan (typically 2 years maximum).  
• Asset separation Transfer of impaired or "toxic" assets to a bad bank to manage them separately and maximise their recovery without jeopardising the rest of the institution (or the bridge institution).  
• Bail-in : This is the central tool of modern resolution. It consists of having losses absorbed and the ailing institution recapitalised by its own shareholders and creditors. In practical terms, this means :
  • L'cancellation or massive dilution of shares existing.  
  • La reduction in nominal value of certain debts (unsecured bonds, subordinated debt, etc.) or their forced conversion into shares (new shares issued to converted creditors).  
  • A strict order of priority is applied: shareholders first, then subordinated creditors, then senior unsecured creditors. Certain liabilities are excluded bail-in to protect financial stability and essential functions: guaranteed deposits, guaranteed liabilities, wage and tax debts, very short-term interbank debts, liabilities to payment and settlement systems....  
  • The bail-in must be accompanied by a reorganisation plan credible to ensure the future viability of the restructured establishment.  

The resolution authority can combine these tools and has extensive powers to implement them: taking full control of the institution (suspending the powers of the corporate bodies), appointing a special administrator, forcibly amending contracts, suspending payments or termination rights, suspending trading in securities, etc..  

Protection of creditors and shareholders ("no creditor worse off")

Resolution powers are governed by a fundamental principle: the "NCWO" (No Creditor Worse Off) principle.. It guarantees that no shareholder or creditor will suffer greater losses as a result of the resolution measures (in particular bail-in) than they would have suffered if the institution had been put into compulsory liquidation under the normal procedure.. An assessment ex post by an independent expert must compare the actual losses due to the resolution and the estimated losses in liquidation. If a creditor or shareholder has suffered greater losses, they are entitled to compensation, generally paid by the relevant guarantee or resolution fund.. This principle aims to reconcile the effectiveness of resolution with respect for property rights and the priority of creditors.. However, appeals against resolution decisions are very limited so as not to hamper their rapid implementation: they have no suspensive effect and the annulment of a measure generally does not call into question transfers already made to third parties in good faith, the appeal being limited to a claim for compensation..  

Judicial handling of difficulties (specific role of the ACPR)

Even with the resolution framework, ordinary judicial procedures (safeguard, reorganisation, liquidation) can still be applied to financial and insurance institutions, but with significant adaptations and a predominant role for the ACPR..  

Adapted cessation of payments and assent for the opening of a new account

For credit institutions and finance companies, the notion of suspension of payments is adapted: it is constituted as soon as the company is unable to ensure payments "immediately or in the near future" (in particular sight deposits), and not only in the face of liabilities due with available assets as in common law. This enables earlier judicial intervention.  

Above all, the opening of any collective proceedings (safeguard, recovery or liquidation) against a credit institution, finance company, electronic money or payment institution, investment firm or financial holding company is subject to theprior approval of the ACPR (supervisory college for safeguarding/recovery, resolution college for liquidation). The court refers the matter to the ACPR, which has a period of time (typically 21 days, sometimes less in an emergency) in which to give its opinion.. An unfavourable opinion blocks the initiation of legal proceedings. This allows the ACPR to favour a resolution measure if it considers it more appropriate to achieve financial stability objectives.. The ACPR's silence is equivalent to a favourable opinion.  

Articulation of powers (ACPR liquidator / judicial bodies)

In the event of compulsory liquidationthe ACPR (supervisory college) appoints a special liquidator (often from the same department), who has extensive powers: inventory, realisation of specific assets, redundancies, etc.. The court-appointed liquidator's powers have been reduced, and he now focuses on verifying and admitting the general liabilities.. If the ACPR had previously appointed a provisional administrator (police measure), the latter retains management powers during the observation period of a receivership, the judicial administrator having only a supervisory role.. This primacy of the bodies appointed by the ACPR is intended to ensure coherent management of difficulties, integrating prudential aspects.. The opening of a compulsory liquidation automatically entails the withdrawal of the establishment's authorisation..  

European universality of procedures

A principle ofEuropean universality applies to both resolution measures and collective proceedings concerning credit institutions, investment firms and insurance undertakings. Decisions taken by the authorities (administrative or judicial) of the home Member State where the establishment has received its authorisation ("home country control") are recognised and have effect in all other EU/EEA Member States, without the need for exequatur.. This ensures that cross-border failures are dealt with in a coordinated and efficient manner.. Exceptions exist for certain types of contracts or assets subject to local law ("lex rei sitae" for buildings, for example)..  

The ACPR's disciplinary powers

In addition to its administrative police and resolution powers, the ACPR has the power to impose sanctions for breaches of professional obligations by the entities and persons it supervises..  

Scope limited to controlled persons and directors

Unlike the AMF, which can sanction any person for market abuse, the ACPR's sanctioning powers are strictly limited to the AMF. disciplinary It only applies to persons subject to its control (listed in Article L. 612-2 of the French Monetary and Financial Code) and their managers (executive directors, members of boards of directors or supervisory boards) where they are personally liable. Third parties cannot be sanctioned by the ACPR.  

Penalties may be imposed for a wide range of breaches, including breaches of any legislative, regulatory or European provision applicable to the business; failure to comply with the conditions of authorisation or commitments made to the ACPR; failure to comply with an administrative police measure; failure to comply with prudential rules (capital adequacy, liquidity, governance, etc.); failure to comply with customer protection or anti-money laundering rules, etc.. Specific penalty systems exist for certain types of breaches or entities. Under the ESM, the ECB may also directly impose financial penalties for breaches of EU law or ask the ACPR to initiate disciplinary proceedings..  

Sanction procedure: investigation, grievances, investigation, hearing

The disciplinary procedure before the ACPR is designed to guarantee the rights of defence and the principle of impartiality, in accordance with the requirements of the European Convention on Human Rights (article 6 §1).. It takes place in several distinct stages:  

1. Investigation and Control The procedure generally begins with the findings of off-site or on-site inspections carried out by the ACPR's departments under the authority of the Secretary General. The inspection report plays a key role.  
2. Decision to initiate proceedings and Statement of Objections If the inspection report reveals shortcomings liable to result in sanctions, the Chairman of the Supervisory Board (or resolution if the breach concerns its powers) decides, after examination by the college concerned, to open disciplinary proceedings. It then draws up a notification of grievancesThis notification is sent to the respondent (the entity and/or managers in question) and to the relevant authorities. This notification is sent to the respondent (the entity and/or managers concerned) and to the Enforcement Committee. It marks the formal start of the disciplinary procedure and sets the framework for the accusation. It must mention the right to consult the file, to be assisted by counsel and, where applicable, the grounds for the personal liability of the directors.  
3. Investigation by a rapporteur As soon as the Chairman of the Enforcement Committee receives the statement of objections, he appoints a member of the Enforcement Committee. rapporteur from among its members (who may not be a member of the supervisory or resolution colleges). The rapporteur investigates the case: he or she may hear any relevant person (including the respondent if it so requests), requests documents and ensures that documents are communicated between the parties in an adversarial manner. He then draws up a report setting out the facts, the parties' arguments, its analysis of the complaints and, where appropriate, a proposed penalty. This report is sent to the respondent and to the representative of the Board that issued the statement of objections.  
4. Hearing before the Enforcement Committee The respondent is summoned to a hearing before the Enforcement Committee. In principle, the hearing is public (unless there is a justified request to go in camera). The rapporteur presents his report, the college representative can support the objections and propose a sanction, and the respondent (assisted by his counsel) presents his defence and has the last word. The Commission may hear other persons if necessary.  
5. Deliberation and decision The Enforcement Committee then deliberates in the absence of the parties and the rapporteur. It issues a reasoned decision, which may include a sanction or an acquittal.  

Respect for the rights of the defence is paramount: access to the file, assistance of counsel, respect for the adversarial process, possibility of requesting the recusal of a member of the commission on grounds of partiality, etc.. Unlike the AMF, there is no statutory limitation period for disciplinary proceedings before the ACPR, but the age of the facts must be taken into account when determining the penalty..  

Penalties applicable: Professional and financial

The Enforcement Committee has a range of professional and/or pecuniary sanctions at its disposal, which it selects according to the seriousness of the breach. Proportionality is a guiding principle.  

Professional sanctions (warnings, reprimands, bans, withdrawal of authorisation, etc.)

These sanctions directly affect the business or reputation of the entity or executives sanctioned:  

• The warning or the blame Moral sanctions with no direct impact on the business.  
• A ban on certain transactions or the temporary limitation of activity (for a maximum of 10 years).  
• La temporary suspension or the compulsory resignation one or more directors (or members of the supervisory bodies). This sanction may only be applied to persons in office at the time of the decision and whose personal liability has been established.  
• Le partial or total withdrawal of approvalor the cancellation from the list of authorised persons: this is the most serious sanction, leading to the cessation of activity and often the liquidation of the entity. For entities authorised by the ECB, the Commission can only propose withdrawal to the ECB and impose a precautionary prohibition on activity.  

Financial penalties (variable ceilings depending on breaches)

The Commission may impose administrative fines, alone or in addition to professional sanctions. The ceilings vary considerably depending on the nature of the breach and the person concerned (entity or manager) :  

• Serious prudential breaches (credit institutions, finance companies, investment firms - art. L. 612-40) or serious breaches of compliance with combating money laundering (art. L. 612-39): Up to 10% of net annual sales of the entity, or the double the benefit of the breach, whichever is greater. For responsible executives, up to 5 million euros or the double the benefit.  
• Other breaches (art. L. 612-39) or failure by intermediaries (art. L. 612-41): Up to 100 million euros for the entity. For executives, up to 5 million euros or the tenfold benefit.  
• There are specific ceilings for certain breaches (marketing of structured deposits, distribution of insurance, breaches by holding companies, etc.).  

Financial penalties are paid into the State budget or the Deposit Guarantee and Resolution Fund, as appropriate. The Commission may impose a penalty to ensure compliance with an obligation to act..  

Publication of penalties

As a general rule, sanction decisions by the Enforcement Committee are issued public (on the ACPR website, sometimes in other publications) at the expense of the person penalised. The purpose of publication is to act as a general deterrent and to inform the market. However, the Commission may decide to not to publish the decision, or to publish it anonymouslyif publication would seriously disrupt the financial markets or cause disproportionate harm to the parties concerned. It may also decide to defer publication if the risks are temporary..  

Appeals to the Council of State

The decisions of the Enforcement Committee may be appealed to the French Supreme Court. full litigation (or full jurisdiction) before the Council of State. This appeal may be lodged by the person sanctioned or by the Chairman of the ACPR (acting on behalf of the supervisory or resolution board) if he considers the sanction to be inappropriate.. The time limit for appeal is two months from the date of notification of the decision. The Conseil d'État, a court of first instance, has the power not only to annul the decision, but also to set it aside. reformto modify it, including by substituting its own assessment of the penalty (nature and amount) for that of the Commission, taking into account all the circumstances of the case.  

The complexity of the procedures and the potential severity of the ACPR's measures and sanctions make legal support essential for supervised entities. The assistance of a banking lawyer can prove invaluable in navigating these requirements or ensuring defence against ACPR sanctions.

For an in-depth analysis of your situation and tailored advice, contact our team of lawyers.

Sources

• Monetary and Financial Code (main articles cited in the text, in particular L. 511-1 et seq., L. 532-1 et seq., L. 611-1 et seq., L. 612-1 et seq., L. 613-24 et seq.)  
• Insurance Code (main articles cited in the text, in particular L. 310-1 et seq., L. 311-1 et seq., L. 321-1 et seq., L. 325-1 et seq.)  
• Relevant EU Regulations and Directives (MSU - Reg. (EU) 1024/2013; MRU - Reg. (EU) 806/2014; BRRD - Dir. 2014/59/EU; Solvency II - Dir. 2009/138/EC; CRR - Reg. (EU) 575/2013; MiFID - Reg. (EU) 600/2014)