FinTech Newsletter No 3
05 October 2022
Main topic: Short Term Credits, Fractioned Payments, BNPL
On 12 July 2022, the ACPR published the results of its investigations (accessible here in French) on short term credits and fractioned payments also known as “buy now pay later” (BNPL) conducted on 11 credit institutions in the second term of 2021. The ACPR highlights that:
Some entities marketing short term credits did not comply with the usury and the “global effective rate” rules
Credit institutions could strengthen precontractual information and make it more accessible; and
Fractioned payments and short-term credits must be formalized through written agreements and repayment period must be shorter than 90 days.
Main topic: Customer Protection, Banking, Insurance
On 13 July 2022, the ACPR and the General Directorate for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF) published a press release (accessible here in French) about their agreement entered into on 17 June 2022 to strengthen their cooperation on customers’ protection in the banking and insurance sectors. The ACPR and the DGCCRF remind that they have been collaborating for a long time to protect customers:
Main topic: Profitability, Digital Actors
On 18 July 2022, the ACPR published a study (accessible here in French) about financial players or intermediaries offering banking or payment online services, or accessible through 100% mobile applications, in order to characterize their business model and assess their profitability in relation to their business strategies.
This study highlights the emergence of new actors competing with traditional credit institutions on segments that until now seemed to be reserved to such traditional actors (such as the financing of SMEs). In relation to this phenomenon, traditional credit institutions tend to adjust their offer or acquire these new competitors. The ACPR study adds that players offering fully mobile or digital access seem to have reached their break-even point or could reach it in the short term by targeting younger and less affluent customers and by relying on a limited range of services or by targeting a niche market.
Main topic: Anti-Scams, Digital Actors
On 19 July 2022, the national anti-scam taskforce (including notably the AMF and the ACPR) published a guide (accessible here in French) noting that customers’ vulnerability has been enhanced by the COVID-19 pandemic. Frauds and scams take various forms and target both customers and companies.
In particular, the guide warns the public against the risk of scams relating to online shopping, savings/credits, false bank transfer orders and phishing.
Main topic: Advertising, Crypto, Influencers
On 19 July 2022, the AMF and the French Professional Advertising Regulatory Authority (ARPP) signed an amendment to their partnership agreement (accessible here in French) on communication in the financial services sector to include digital assets and services on digital assets. The AMF and the ARPP will also jointly work on the conduct of influencers in finance.
The two authorities have also drawn up a joint work program for 2022 and 2023. The priorities include in particular the creation of a recommendation on communications involving digital assets and tokens offerings.
Main topic: Payment Services, Exemption
On 20 July 2022, the ACPR published a position 2022-P-01 (accessible here in French) on the limited network of acceptors and limited range of goods and services exemption to payment services licensing requirements, to take into account recent market evolutions and the EBA Guidelines of 22 February 2022 (EBA/GL/2022/02).
Updates to the previous ACPR position 2017-P-01 include:
Main topic: Crypto, Commission
On 22 July 2022, Ms. Nathalie Goulet (senator) submitted a proposal before the Senate in order to create a commission of inquiry on crypto-assets (more information accessible here in French) whose purpose would be to carry out an assessment of the current situation and to make concrete proposals aimed at regulating and securing the use of crypto-assets.
Main topic: Crowdfunding
On 31 August 2022, the ACPR published a document (accessible here in French) specifiying that further to an extension of the transitional period adopted by the European Commission, crowdfunding intermediaries (IFP) have until 10 November 2023 (instead of 10 November 2022) to comply with the new legal framework applicable to crowdfunding services and, if necessary, to obtain their license as crowdfunding service providers (CSPs) from the AMF.
Main topic: Crypto, DAOs, DeFI
On 10 June 2022, the former MP Pierre Person (who was particularly involved in the crypto-assets industry) published a report entitled “Currencies, Banks and Finance: towards a new crypto era”. In his report, Pierre Person advocates for the adoption of an appropriate framework for crypto-assets, highlighting that such framework cannot be the same as the one for traditional finance.
As a result of this report, Pierre Person makes 22 proposals covering different topics such as the right to open an account, taxation, sustainable development, NFTs, monetary sovereignty and decentralised finance (DeFI).
Main topic: Banking, Insurance, Savings
On 14 June 2022, the AMF and ACPR joint unit for insurance, banking and savings published its annual report (accessible here in French), where it points out in particular:
Main topic: NFTs, Art, Culture
On 12 July 2022, the Superior Council of Artistic and Literary Property (CSPLA) released a report (accessible here in French) on Non-Fungible Tokens (NFTs). The report analyzes the issues raised by the development of NFTs in the cultural industries. The report points out in particular that their development is synonym of opportunities for artists. However, the report reminds that NFTs are still relatively new and that their legal framework is yet to be determined.
Main topic: DLT, Digital Financial Securities, Pilot Regime
On 18 July 2022, the French Association for the Development of Crypto-Assets (ADAN) published its second annual activity report (accessible here in French).
The report highlights the main topics addressed by the ADAN in 2021, in particular:
Main topic: DLT, Digital Financial Securities, Pilot Regime
On 19 July 2022, the Legal High Committee for Financial Markets of Paris (HCJP) published a report on the reform of digital financial securities (accessible here in French) before the Pilot Regime Regulation comes into force. The report deals with the following topics :
The report explores two main options:
Regulatory – Financial Services: Hubert Blanc-Jouvan, Partner; Maxime Gandibleux, Counsel; Francesco Assi, Senior Associate; Oriane Lemesle, Associate.
Structured Finance – Digital Lending: Agathe Motte, Partner; Aurélien Fournier-Her, Counsel; Lucien Jarry, Associate.
The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
Readers should take legal advice before applying it to specific issues or transactions.