The French Financial Markets Authority has published a thematic note setting out the legal and regulatory framework for the guarantee mechanism that applies to certain French portfolio management companies. The scheme is designed to compensate eligible investors when a participating firm cannot return or reimburse securities or cash because of its financial situation, including in cases involving fraud, and it is separate from the securities guarantee mechanism for other investment services providers. The mechanism is managed by the Deposit Guarantee and Resolution Fund. The note explains that the scheme covers French portfolio management companies authorized to provide one or more investment services, and those that maintain registered accounts for units or shares in collective investment undertakings they manage directly or through delegation. Membership has applied automatically since publication of the Aug. 5, 2022 order. Covered losses include cash or financial instruments improperly held by the management company, registered fund units or shares that cannot be returned because of fraud or register anomalies, and assets managed under an individual portfolio mandate that cannot be returned because of fraud. Institutional investors listed in the Monetary and Financial Code are excluded, while other eligible investors are covered regardless of nationality or domicile. Activation requires the French Financial Markets Authority to request implementation by the Deposit Guarantee and Resolution Fund after finding that a participating firm cannot immediately or in the short term return or reimburse covered assets. The fund begins compensation within three months of that finding, subject to extension in exceptional circumstances, and the cap is EUR 20,000 per eligible investor across covered securities and cash regardless of the number of contractual relationships with the firm. Participating management companies must also provide ongoing information on the scheme to investors and, since 2025, pay annual contributions and operating levies to fund the mechanism, with allocation calculated by the French Financial Markets Authority and additional funding coming from certain monetary sanctions imposed on participating firms.
France Autorite des marches financiers2026-06-29
French Financial Markets Authority outlines management company services guarantee scheme with EUR 20000 investor compensation cap
The French Financial Markets Authority has published a note explaining the guarantee scheme for certain French portfolio management companies. The mechanism, run by the Deposit Guarantee and Resolution Fund, can compensate eligible investors when a participating firm cannot return covered securities or cash, with a cap of EUR 20,000 per investor. It applies to firms providing specified investment services or maintaining registered fund accounts, and is funded by annual contributions from participating firms.