The French Prudential Supervision and Resolution Authority (Autorité de contrôle prudentiel et de résolution, “ACPR“) published on 10 January 2022 a handbook for Fintechs in order to assist them with better understanding the legal and regulatory framework to which they may be subject to, and which might fall under the ACPR’s supervision. The handbook was drafted by a working group within the ACPR involving both representatives of Fintechs and ACPR officers.
This handbook (entitled “Charter for the appraisal of “Fintech” authorisation requests“, available here) details the steps a Fintech will have to follow with the ACPR to obtain the registration or license necessary to carry out its activity. More specifically, the handbook focuses on the following:
- it sets out the ACPR’s expectations towards the Fintech wishing to launch its project in France, prior to it submitting an application. In this respect, it is worth noting that the ACPR indicates that it will provide answers to the Fintech with regards to the legal qualification of the services it wishes to provide (including on the legal implications of outsourcing part of its activity to an external service provider), before it submits an authorisation application. By doing so, the ACPR therefore implicitly encourages Fintechs to initiate contact as early as possible, enabling them to get off on a good start, instead of them trying at a later stage to adapt their project to the French regulatory framework. To facilitate contacts with Fintechs that are not yet established in France, the ACPR indicates that communications may be made in the early stages of the application in English.
- it sets out the ACPR’s expectations and course of action with regards to the application. More specifically, the ACPR prompts Fintechs to wait for their project to be well defined and to be in a position to be able to fill out all sections of their application instead of submitting an incomplete / draft intermediary application.
- it provides clear deadlines it commits to complying with in relation to dealing with the application (and also imposes certain deadlines to applicants); this is all the more welcome as the timeline and delay within which an authorisation/license may be obtained constitute crucial considerations for these types of market players when assessing whether to launch a product/service in France:
- it may request clarifications within three weeks of initial submission;
- it may then ask to schedule a phone call with the Fintech within the next week, for further clarifications;
- within two weeks of receipt of the additional elements, the ACPR will provide feedback to the Fintech – this may include scheduling a meeting with the various authorities that may be involved in addition to the ACPR (Banque de France and French Financial Markets Authority (“AMF“) and the Fintech, to have a more effective and constructive dialogue;
- once the file is deemed complete, the ACPR informs the Fintech and provides an indicative date of review by the supervisory college of the ACPR;
- the ACPR informs the applicant of the decision made by the supervisory college within 2 working days following the decision.
- it provides information on the exemption procedures that may be available to the applicant, and the manner through which such exemption may be obtained; therefore, it is necessary for the market player to initiate contact with the ACPR, even if it deems that it benefits from an exemption, for the ACPR to carry out its own assessment and have it reviewed by the supervisory college;
- it details the procedure relating to registering agents providing payment services – this may for instance bet useful for credit institutions acting through Banking-as-a-Service (BaaS), and relying on agents to market their services and products;
- finally, it highlights how the AMF and the ACPR cooperate in relation to the registration of digital asset service providers (“DASPs“); indeed, although the registration process of DASPs falls within the AMF’s scope, the ACPR is still involved in the process, and must give a formal opinion on the application to the AMF within three months of the application being submitted. During this time, the ACPR will check whether or not the services provided by the application require an additional authorisation, falling within its scope, in which case the applicant and the AMF will be informed in a timely manner to ensure that this additional authorisation does not cause the Fintech to incur excessive delays.
Alongside the handbook, the ACPR has added new sections to its website (for the time being only available in French), for educational purposes. These sections cover topics such as how to assess whether an activity is regulated, the key issues that the ACPR focuses on when reviewing authorisation/license applications (in both the banking and finance and insurance sectors), own funds and benefitting from a passport to provide a service in another Member State.
In a nutshell, these publications illustrate the ACPR’s wish to better support Fintechs, in order to encourage them to develop their activities in France without fearing of breaching the legal or regulatory frameworks. It will be interesting to see how this impacts the French Fintech landscape.