Opinion of the European Central Bank of 20 April 2004 at the request of the French Ministry of Economic Affairs, Finance and Industry on a draft decree concerning negotiable debt securities (CON/2004/15)
Date: 2004-04-20
Institutions: European Central Bank
Subjects: France, financial stability, national law, negotiable instrument, securities, statistics

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 20 April 2004 

at the request of the French Ministry of Economic Affairs, Finance and Industry 

on a draft decree concerning negotiable debt securities 

(CON/2004/15) 

1. 

On 15 March 2004 the European Central Bank (ECB) received a request from the French Ministry 

of Economic Affairs, Finance and Industry for an opinion on a draft decree concerning negotiable 

debt securities (hereinafter the ‘draft decree’).  

2. 

The  ECB’s  competence  to  deliver  an  opinion  is  based  on  the  third,  fourth  and  sixth  indents  of 

Article 2(1) of Council Decision 98/415/EC of 29 June 1998 on the consultation of the European 
Central  Bank  by  national  authorities  regarding  draft  legislative  provisions1,  as  the  draft  decree 

concerns a national central bank, statistics and rules  applicable to financial institutions insofar as 

they materially influence the stability of financial institutions and markets. In accordance with the 

first  sentence  of  Article  17.5  of  the  Rules  of  Procedure  of  the  European  Central  Bank,  the 

Governing Council has adopted this opinion. 

3. 

Article 36 of the French Law No 2003-706 of 1 August 2003 on financial security2 (hereinafter the 

‘Law’) amended Articles L. 213-3 and L. 213-4 of the Monetary and Financial Code (hereinafter 

the ‘Code’) which concern the regime applicable to the issue of negotiable debt securities (titres de 

créances  négotiables,  TCN).  The  draft  decree  implements  these  two  articles  of  the  Code  and 
amends  Decree  No  92-137  of  13  February  1992  on  negotiable  debt  instruments3  (hereinafter  the 
‘Decree’). In its opinion of December 2002 on a draft version of the Law4, the ECB welcomed the 

French  authorities’  aim  of  modernising  and  simplifying  some  of  the  rules  applicable  to  the  TCN 

market.  For  instance,  the  obligation  imposed  on  TCN  corporate  issuers  to  prove  that  they  had 

existed  for  two  years  was  repealed  while  the  applicable  language  regime  for  issuers  when 

submitting the financial documentation was relaxed. Furthermore, the Law extended the capacity to 

issue  TCN  to,  inter  alia,  local  authorities,  States,  certain  types  of  associations  and  securitisation 

funds.  

1  
2  
3  
4  

OJ L 189, 3.7.1998, p. 42. 
Official Journal of the French Republic, No 177, 2 August 2003. 
Official Journal of the French Republic, No 32, 14 February 1992. 
CON/2002/32, 18 December 2002. 

 
 
 
                                                      
4. 

The draft decree is intended to further clarify the conditions of application of Articles L. 213-3 and 

L. 213-4 of the Code as well as the responsibilities of the Banque de France concerning the TCN 
market. TCN must have a value per unit of at least EUR 150 0005. Under the terms of Article 4(c) 
of the ‘COB’ Regulation Noº98-08 regarding public offerings of financial instruments6, there is no 

obligation  to  produce  a  simplified  prospectus  for  public  offerings  of  financial  instruments  when 

their value is at least 150 000 EUR. However, according to the proposed amendment to Article 8 of 

the  Decree,  TCN  issuers  must  submit  financial  documentation  to  the  Banque  de  France  (which 

contains, inter alia, an information memorandum). The ECB also notes that non-supervised entities 

(i.e.  entities  which  are  not  credit  institutions,  investment  firms  or  insurance  companies)  the 

securities of which are not admitted to trading on a regulated market must provide a rating of their 

issue  programme  or  be  guaranteed  by  a  guarantor  benefiting  from  such  a  rating  (proposed 

amendment  to  Article  6  of  the  Decree).  These  arrangements  do  not  give  rise  to  any  specific 

remarks from the ECB. 

5. 

As regards the language regime, the financial documentation may be submitted in English provided 

that it is accompanied by a summary in French for which the issuer is responsible when the TCN 

are privately placed with qualified investors, or when they may only be subscribed to or acquired 

for at least the equivalent of EUR 50 000 (proposed amendment to Article 12 of the Decree). The 

requirement  of  submitting  the  relevant  financial  information  according  to  French  accounting 

standards  has  been  abolished  by  the  draft  decree.  The  ECB  also  notes  that  the  information 

memoranda  (including  any  summary)  will  be  made  available  on  the  Banque  de  France's  website 

(proposed amendment to Article 14 of the Decree). The ECB welcomes these provisions. The ECB 

also  understands  that  these  provisions  aim  to  enlarge  the  investor  base  and  increase  the 

transparency  of  the  TCN  market.  In  addition,  these  amendments  correspond  to  some  of  the 

recommendations  contained  in  the  final  report  of  the  Euribor-ACI  Short-Term  European  Paper 
Task  Force7  aimed  at  encouraging  the  convergence  of  the  heterogeneous  market  standards  and 

practices that currently prevail in the segmented European short-term markets.  

6. 

The  proposed  amendment  to  Article  8  of  the  Decree  provides  that  the  Banque  de  France  may 

request  additional  information  from  a  TCN  issuer  where  a  particular  situation  so  justifies.  The 

proposed amendment to Article 16 of the Decree further provides that TCN issuers shall provide 

the  Banque  de  France  with  statistical  information  concerning  their  securities  under  conditions 

determined  by  a  ministerial  order.  The  Ministerial  Order  of  31  December  1998  indicates  in  this 

respect that TCN issuers shall provide the Banque de France with information on the characteristics 

of each issue as well as on the daily outstanding value of the securities issued. The ECB is of the  

5  

6  
7  

See  the  Ministerial  Order  of  31  December  1998  laying  down  the  conditions  which  must  be  fulfilled  by  issuers  of 
negotiable debt securities, Official Journal of the French Republic, No 2, 3 January 1999. 
Official Journal of the French Republic, No 51, 2 March 1999. 
The ACI-Financial Markets Association released the final report of the Euribor-ACI Short-Term European Paper Task 
Force on 10 March 2004. This report is available at www.aciforex.com. 

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view  that  the  allocation  of  ISIN8  codes  to  securities  issued  and  references  to  MFI9  codes  if 

securities  are  issued  by  credit  institutions  constitute  useful  information  for  statistical  purposes.  It 

should  be  added  that  Article  15  of  the  Decree  provides  that  TCN  may  be  issued  in  a  foreign 

currency  and  that  the  Banque  de  France  may  however  decide  to  temporarily  suspend  issue  of 

securities  denominated  in  a  given  foreign  currency  for  ‘monetary  regulation  reasons’.  The  ECB 

notes that this reference to ‘monetary regulation reasons’ dates back to 1992, i.e. a time when the 

Eurosystem  did  not  exist  and  competencies  concerning  monetary  matters  had  not  yet  been 

transferred to the ECB. However, since such a reference may now, after the establishment of the 

Eurosystem  and  the  introduction  of  the  euro,  raise  questions  as  to  its  meaning,  the  ECB  would 

recommend replacing the expression ‘for monetary regulation reasons’ with ‘if the circumstances 

so justify’.  

7. 

The  ECB  confirms  that  it  has  no  objection  to  the  competent  national  authorities  making  this 

opinion publicly available at their discretion. This opinion will be published on the ECB’s website 

six months after the date of its adoption. 

Done at Frankfurt am Main on 20 April 2004. 

The President of the ECB 

Jean-Claude TRICHET 

8  
9  

International securities identification number. 
Monetary financial institution. 

3