Regulation 99-05 of 9 July 1999

Regulation 99-05 of 9 July 1999, relating to the guarantee of deposits and other repayable funds received by credit institutions having their headquarters in France or in the Principality of Monaco

Title I - Guaranteed deposits and other repayable funds
Title II - Maximum compensation
Title III - Terms and time limits for compensation
Title IV - Information provided to depositors
Title V - Sundry provisions

The deposit guarantee fund referred to at Article L. 312-4 of the Monetary and Financial Code shall compensate, under the conditions set forth herein, the deposits and other repayable funds received by credit institutions authorized by the Comité des Etablissements de Crédit et des Entreprises d’Investissement having their headquarters in France or in the Principality of Monaco.

Deposits and other repayable funds guaranteed pursuant to Article L. 312-4 of the Monetary and Financial Code and this Regulation, hereinafter referred to as the "deposits", shall mean any credit balance resulting from funds left in an account or from temporary situations deriving from normal banking transactions which a credit institution must repay under the legal and contractual conditions applicable, particularly in clearing arrangements. The deposits thus defined shall include guarantee deposits, when they become repayable, and sums due on production of interest-bearing notes and payment media of any kind issued by the institution and cash deposits, including those made to guarantee or cover positions taken on a market in financial instruments, when such deposits relate to an investment service or to the clearing or custody of financial instruments provided by such institution

For credit institutions having their headquarters in metropolitan France and in French overseas departments, the deposits referred to in the preceding paragraph shall include those in the books of their branches established in other States party to the agreement on the European Economic Area.

The following shall be excluded from repayment by the guarantee fund :

2° Deposits arising out of transactions in connection with which the depositor has been convicted for the crime of money laundering under the terms of Articles 222-38, 324-1 or 324-2 of the Penal Code or Article 415 of the Customs Code;

3° Deposits for which the depositor has, on an individual basis, obtained from the same credit institution rates and financial concessions which have helped to aggravate its financial situation;

Deposits held when an institution’s authorization is revoked or when an institution is struck off shall continue to be covered by the guarantee fund.

The limit on compensation for each depositor shall be € 70,000. It shall apply to all of the same depositor’s deposits with the same credit institution, irrespective of the number of deposits, the location within the European Economic Area and, subject to the provisions of Article 3.4(f) of the present Regulation, the currency concerned.

The share of each depositor in a joint account shall be taken into account in calculating the limit mentioned in the preceding Article. In the absence of special provisions, such account shall be divided equally amongst the depositors.

Deposits in an account to which two or more persons are entitled as shareholders or members of an association or any similar grouping not having legal personality shall be aggregated and treated as if made by a single depositor for the purpose of calculating the same limit.

When the depositor is not entitled to the sums deposited in the account, it is the person entitled to them who is covered by the guarantee, provided that such person has been identified or is identifiable before the date on which it is determined that the deposits are unavailable. If several persons are entitled, the share of each under the arrangements subject to which the sums are managed shall be taken into account when the limit referred to in the preceding Article is calculated.

Except in cases where reorganization or liquidation proceedings are initiated, the Commission Bancaire, after determining that deposits are unavailable twenty-one days at the latest after first having established that a credit institution has not repaid a due and payable deposit for reasons that may be related to its financial situation and that it appears unlikely that repayment will be made soon, shall immediately ask the deposit guarantee fund to intervene under the terms of the first paragraph of Article L. 312-5 of the Monetary and Financial Code and shall notify the credit institution that it has been struck off.

On the basis of documents furnished by the credit institution concerned, the guarantee fund shall verify depositors’ claims in respect of the unavailable deposits and shall promptly inform them by registered letter that the deposits are unavailable. The letter shall inform each depositor of the amount and nature of deposits covered by the deposit guarantee and of claims that are excluded from compensation under the terms of Articles 3 and 5 of the present Regulation. It shall also inform depositors that they have fifteen days in which to make known all remarks relevant to their compensation or to challenge the proposed breakdown. On expiry of this deadline, the guarantee fund shall begin paying compensation to the depositors.

The letter mentioned in the preceding paragraph shall inform depositors of the terms and conditions and of the procedures to be followed, if reorganization or liquidation proceedings have been initiated with respect to the defaulting credit institution, in order to submit claims excluded from compensation by the deposit guarantee fund to the creditors’ representative or to the liquidator appointed by the commercial court.

The guarantee fund may not invoke the time limits laid down in the first and third paragraphs above to deny benefit of the guarantee to any depositor who furnishes proof that he was unable to assert in time his claim to payment under the guarantee.

Compensation shall be paid in euros. Deposits in foreign currencies shall be converted into euros at the rate applying on the date on which the deposits became unavailable.

Notwithstanding the time limits laid down in the third paragraph of Article 8, when the depositor or any other person having entitlement to or an interest in sums held in an account is under investigation on suspicion of money laundering under the terms of Articles 222-38, 324-1 or 324-2 of the Penal Code or Article 415 of the Customs Code, the guarantee fund shall suspend the corresponding payments pending the court’s final decision.

If a reorganization or liquidation procedure has been initiated with respect to a credit institution and the deposit guarantee fund has intervened with respect to the same credit institution, the fund shall provide the creditors’ representative or the liquidator appointed by the commercial court with a detailed list for each depositor of the claims it has paid and of claims that have not been paid under the terms of Articles 3 and 5 of the present Regulation.

Credit institutions subject to the present Regulation shall furnish depositors and any other person making such request with all relevant information about the deposit guarantee mechanism, including in particular the level and scope of the cover provided.

Credit institutions subject to the present Regulation may not use such information for advertising purposes.

Depositors may obtain further information about terms or time limits for compensation and about the formalities for obtaining compensation from the guarantee fund on request.

Information intended for depositors and documents relating to the conditions to be met and formalities to be accomplished in order to benefit from a payment under the deposit guarantee arrangements shall be provided in French, in a detailed manner that is readily comprehensible to any depositor.

Credit institutions that manage a mutual guarantee fund shall inform persons asked to participate in such fund of the conditions under which their contributions will be repaid. The institutions shall also inform the depositor when such sums become repayable, under the terms of the guarantee fund’s by-laws.

Managing institutions shall state the conditions under which such sums are covered by the deposit guarantee fund, and in particular shall specify that contributions are covered by the above-mentioned fund only when they have become repayable.

Notwithstanding the provisions of Article 9 of the present Regulation, until 31 December 2001 depositors may ask to be compensated in French francs.

The present Regulation shall take effect immediately and shall replace the above-mentioned Regulation 91-05, which shall nevertheless continue to apply in the overseas territories and the territorial unit (collectivité territoriale) of Mayotte.

Until the guarantee fund has been finally put in place, in the event of an incident the Commission Bancaire shall cause the credit institution concerned to take appropriate steps to identify and verify claims. In accordance with Article 75-III of the above-mentioned Act of 25 June 1999, the Commission Bancaire shall decide how to allocate the contributions it has called up; compensation shall be paid on behalf of the guarantee fund, under the conditions laid down in the present Regulation, by the Treasury, which is responsible for collecting and managing the above-mentioned contributions.

Fond de Garantie des dépôts