In-depth Listed companies & corporate financing: Equity markets

Law on simplification of the law and administrative procedures ("Warsmann IV" Law)

Published on March 30, 2012

The Law of 22 March 2012 on simplification of the law and administrative procedures aims to simplify the legal environment and daily operations of French SMEs in a wide range of areas, several of which concern the stock market sector. It also enhances threshold crossing transparency to fight more effectively against creeping takeovers.

Crossing of thresholds and cash-settled derivatives

The new system aims to improve the threshold crossing reporting system by including cash-settled derivatives in the scope of calculation, on the same basis as physically-settled instruments. It thus abolishes the separate disclosure of cash-settled derivatives made on crossing a threshold, introduced by the Order of 30 January 2009, and includes these instruments in the calculation. The inclusion of these complex financial products (especially contracts for difference (CFD) and cash-settled equity swaps) in the threshold crossing and therefore reporting calculation will avoid an increase in the number of creeping takeovers.

This new system also reinforces declaration of intent requirements by creating an obligation for companies crossing a threshold to declare their intentions concerning the cash-settled instruments they hold.

Finally, it introduces a new declaration to disclose modifications to equity stake structure between different types of instruments. This measure will ensure that the public is informed of the real level of control of a company resulting from an increase in the voting rights effectively held in such cases. The AMF General Regulation specify the terms of this declaration.

It should be noted, however, that cash-settled instruments are excluded from the stake threshold calculation for triggering a mandatory bid.

This new system came into force on 22 October 2012.

Extension of share buy-back possibilities on Alternext

The law extends the effects of the 2009 reform simplifying share buy-back techniques to companies listed on Alternext, in order to enhance liquidity of securities and simplify publication rules. Article L. 225-209-1 of the Commercial Code is therefore abolished and companies listed on Alternext are now included within the scope of Article L. 225-209. It also brings the terms on share buy-backs by these companies into line with those applicable to companies admitted to trading on a regulated market (NYSE Euronext). The AMF General Regulation has been modified accordingly and is currently pending approval.

Abolition of the document summarising the information provided in the course of the past year for companies listed on a regulated market

The Law abolishes Article L. 451-1-1 of the Monetary and Financial Code and therefore removes the obligation for companies listed on a regulated market to file a document with the AMF summarising all the information they have disclosed to fulfil their legal and regulatory obligations in the course of the past year.

Authorisation for the government to transpose European texts by means of Orders

The law authorises the government to transpose Directive n°2010/73/EC of the European Parliament and Council of 24 November 2010 amending Directives n°2003/71/EC known as the “Prospectus Directive” and n°2004/109/EC known as the “Transparency Directive” by means of Orders.

Adaptation of money laundering prevention systems

The law adapts the intensity of the identity-check measures required of online payment service providers when there is no suspicion of money laundering. When the risk of laundering appears low, the persons concerned may choose not to check the identity of the client and, if applicable, of the effective beneficiary of the business relationship.

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Legal information
Head of publications: The Executive Director of AMF Communication Directorate.
Contact: Communication Directorate – Autorité des marches financiers 17 place de la Bourse – 75082 Paris cedex 02