French Prospectus Regulation

The Regulatory Framework

French prospectus regulation is governed by the EU Prospectus Regulation (Regulation 2017/1129, as amended) and supplemented by the Code monétaire et financier (CMF) and the Règlement Général de l’Autorité des Marchés Financiers (AMF RG). The AMF (Autorité des Marchés Financiers) is the competent authority responsible for approving prospectuses in France and supervising compliance with disclosure obligations. The AMF’s powers include the approval, suspension, and refusal of prospectuses, as well as the imposition of sanctions for non-compliance.

The Prospectus Regulation establishes a single European regime for the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market. The regulation aims to ensure investor protection and market efficiency while reducing the cost of capital raising, particularly for small and medium-sized enterprises (SMEs).

AMF Approval and Content Requirements

A prospectus must be approved by the AMF before any public offer of securities or admission to trading on a regulated market in France. The AMF reviews the prospectus for completeness, consistency, and comprehensibility, and must issue its decision within 10 working days (20 working days for first-time issuers). The prospectus must contain all information necessary for investors to make an informed assessment of the issuer, the securities being offered, and the risks involved.

The prospectus consists of three components: a registration document (document d’enregistrement), a securities note (note relative aux titres), and a summary (résumé). The summary must be concise, non-technical, and written in plain language. The AMF has published detailed guidance on the content of prospectuses, including recommendations on risk factors, financial statements, and working capital statements. The AMF may require modifications to the prospectus before approval, and its decisions are subject to appeal before the Conseil d’État.

Simplified Regimes

The Prospectus Regulation provides for several simplified regimes. The EU Growth Prospectus (formerly the Prospectus for SMEs) is available for SMEs and other qualifying issuers, with reduced disclosure requirements and a simplified summary. The Universal Registration Document (URD) regime allows frequent issuers to file an annual registration document with the AMF, which may be incorporated by reference into successive prospectuses.

France has implemented the national exemptions permitted by the Prospectus Regulation, including exemptions for offers of securities addressed solely to qualified investors, offers to fewer than 150 persons per member state, offers with a total consideration of less than €8 million over 12 months, and offers of securities with a denomination per unit of at least €100,000. The Loi PACTE (Law No. 2019-486 of 22 May 2019) extended the national exemption threshold for offers to the public from €8 million to €12 million, subject to the preparation of an AMF-approved information document.

Retail vs Professional Investors

The distinction between retail and professional investors is fundamental to French securities regulation. Offers to retail investors require a full prospectus approved by the AMF, with enhanced disclosure and investor protection measures. The prospectus summary must be comprehensible to retail investors and must include a key information document (document d’information clé) for packaged retail investment and insurance products (PRIIPs).

Offers to qualified investors (investisseurs qualifiés) benefit from reduced disclosure requirements. Qualified investors are defined in Article L. 411-2 CMF and include credit institutions, investment firms, insurance companies, pension funds, and professional investors with the expertise and capacity to make their own investment decisions. The offer must ensure that the securities are not offered or sold to retail investors through public channels.

Passporting

A prospectus approved by the competent authority of any EU member state may be passported into France under the “single passport” regime of the Prospectus Regulation. The issuer must notify the AMF of the passporting request, providing a certificate of approval from the home state authority, a copy of the prospectus, and a translation of the summary into French. The AMF must review the notification within seven working days and may not impose additional requirements or substantive review.

The passporting regime has been widely used for debt and equity offerings in the French market. The AMF maintains a public register of approved and passported prospectuses on its website.

Liability for Misleading Statements

Liability for misleading statements in a prospectus is governed by Articles L. 621-8-4, L. 621-14, and L. 621-15 CMF. The issuer and its directors may be held liable for damages where the prospectus contains false or misleading information or omits material information necessary for investors to make an informed decision. The Cour de cassation in Com. 12 February 2020, No. 18-18.946 confirmed that the issuer’s liability for prospectus misstatements is based on fault (faute) and that the burden of proof lies with the claimant investor.

The AMF may impose administrative sanctions for prospectus violations, including public warnings, fines of up to €100 million or 10% of annual turnover, and prohibitions on conducting securities business. The Commission des Sanctions of the AMF conducts quasi-judicial proceedings with full due process protections. Criminal penalties for fraudulent prospectuses (Article L. 465-3 CMF) include imprisonment of up to five years and fines of up to €500,000.

Sanctions and Enforcement

The AMF’s enforcement powers have been strengthened by the Loi PACTE and the Loi de séparation et de régulation des activités bancaires (Law No. 2013-672 of 26 July 2013). The AMF may impose fines of up to €100 million or 10% of annual turnover for serious violations. The AMF also has the power to issue injunctions, suspend trading, and require corrective disclosure.

The Conseil d’État in Decision No. 442456 (2021) upheld an AMF sanction against an issuer for omitting material risk factors in a prospectus, rejecting the argument that the omission was inadvertent. The court held that the AMF need not prove intent to mislead; negligence in the preparation of the prospectus is sufficient to establish a violation.