THE FRENCH STOCK EXCHANGE
& RELATED FINANCIALMARKETS
How they operate
and how they are regulated

PRESENTATION OF THE 2011 ANNUAL REPORT OF THE AUTORITÉ DES MARCHÉS FINANCIERS
 
This annual report was presented on the 29th June by Jean-Pierre Jouyet, President of the Autorité des Marchés Financiers. It contains five chapters: 1) The Autorité des Marchés Financiers and savers, 2) The provision of investment services and savings products, 3) Market infrastructures, 4) Financial operations and the quality of information, 5) Surveillance and market discipline, 6) The administrative composition and sanctions procedures.
Jean-Pierre Jouyet summed up the principal tasks accomplished in 2011:

1) In its mission to protect savings, the AMF adapted its internal organisation by creating a department to deal with relations with savers. This department established a dialogue with savers and developed tools to improve the understanding of the mechanisms used to market financial instruments;
2) To protect minority shareholders, the AMF continued its fight against rampant company takeovers. Thus, through its initiative, the Parliament voted the reduction to a 30% threshold for the holding of capital or voting rights providing access to a company’s capital;
3) The AMF intervention plan regarding the surveillance of risks and its repressive itinerary was extended to transactions on derivative instruments, including those on raw materials. As for the sanction procedure, it evolved considerably with the law on banking and financial regulation. In particular, it gave the President of the AMF the right to contest the decisions of the Sanctions Commission. The AMF was also attributed the right to enter into transactions for incidents concerning the violation of the rules of good conduct for professionals; 
4) The AMF continued being strongly invested in the vast movement for financial regulation on French, European and international levels. Several important reforms were initiated:

- the transparency regime for short sales;
- the transfer of the supervision of rating agencies to ESMA, after their authorisation by the AMF;
- the reform of monetary UCITS and the transposition of the UCITS Directive IV;
- modification of the takeover bid regime with the bid threshold taken from 33% to 30%;

5) Within the framework of European negotiations, the AMF participated in the setting up of a European regulation on the clearing of derivatives (EMIR) and the revision of the Directive on financial markets (MIF).
Jean-Pierre JOUYET finally mentioned future challenges facing the AMF:  

1) The codes of company government: it would be preferable that they be submitted to a large process concerning investors and listed companies in order to create market consensus. The power of general assemblies should be reinforced, namely concerning the right of shareholders to control the remuneration of directors;  
2) Marketing of investment products for savers: the AMF will aim its efforts at regulating and controlling the commercial language itself and not simply the investment advice deriving from it. Thought will be given to the issue of investment advice and the regulation of the distribution of financial products. This may lead to the revision of the conditions of exercise, remuneration and regulation of the profession of financial advisor, whether carried out within a large network or in independent establishments;
3) Financing the economy, regulating markets and maintaining the coherence of public policy: prudential and fiscal rules, in particular, play a role in the allocation of financial fluxes and must therefore be thought out considering their contribution towards financing the economy; measures taken to reform the structure of banks must be clear and precise to ensure the proper financing of the economy, employment and companies. Financing the economy also requires a coherent, efficient and well aimed savings policy. Baring this in mind, special attention should be paid to the asset management industry which plays an essential role in the allocation of the savings of private and institutional investors.

 

PROJECT TO CREATE A COMPANY STOCK EXCHANGE

Presented during the international financial encounters organised by Paris Europlace on the 3 and 4 July 2012, the report given by the Nyse Euronext Orientation Committee concerning the creation of a stock market for small and medium-sized companies will be examined by the different actors of the stock exchange until September 2012. This market has been baptised “Bourse de l’entreprise” and is a subsidiary of the Nyse Euronext that will be dedicated to small and medium-sized companies. It  will welcome companies belonging to segments B and C of Euronext as well as companies listed on Alternext, amounting to around 900 companies with a total market capitalisation inferior to 1 billion euros.