View the definition of technical terms
Difference between the sum of the debit and credit transactions on an account from the time it was opened. The account has a credit (positive) balance when the total credits exceed the total debits, and a debit (negative) balance otherwise.
Accounts of an individual business owner with the status of EURL or EIRL
A limited liability individual business owner (EIRL) and a one-person limited liability company (EURL) are treated as full holders, separate from the business. In this case, the business owner's business accounts and personal accounts are covered separately by the deposit guarantee scheme up to €100,000. If there is no EURL or EIRL, the personal and business accounts are added together.
Source : FGDR
Accounts subject to attachment or garnishment
Prior to calculating the compensation, the accounts are debited for the amount of the attachments or garnishment. The FGDR compensates the depositor for the portion of their accounts that is available after this operation. Then, where applicable, the FGDR compensates the creditor in the amount of its claim up to the difference between €100,000 and the compensation already paid to the depositor.
Source : FGDR
Accounts with “beneficiaries, business accounts with a special status, ring-fenced accounts, omnibus accounts
These accounts are opened by a professional in its name in order to deposit funds belonging to other individuals who are the beneficiaries, for example an account opened by a property management company for the management of co-owned buildings, a lawyer's CARPA account or a ring-fenced account opened by an investment firm for its clients’ cash funds. The beneficiaries are the recipients of the compensation, separately from the compensation for which they may also be eligible as direct customers, and provided they have been identified or can be identified on the failure date. The FGDR calculates the compensation accruing to each beneficiary based on the information provided to it by the institution. It pays the full compensation to the account holder (or to the beneficiaries for an omnibus account), and the holder is responsible for distributing it among the beneficiaries. The beneficiaries are covered up to the €100,000 ceiling, and also have the right to additional compensation for Temporary High Balances.
Source : FGDR
ACPR - Prudential Supervision and Resolution Authority
Source : ACPR
Actual cash value
Price the owner would have received if he had sold the asset on the date of the loss. The actual cash value of an asset is the price paid under normal market conditions.
AFB - French Banking Association
The AFB acts as an employers' association, pursuant to the collective agreement of the banking industry of January 2000, for commercial banks. It represents employers in the dialogue between management and labour and in negotiations with trade unions (collective agreement, salaries, employment, professional training, etc.). As a founding legal entity, the AFB is a member of the new French Banking Federation (FBF). Its role is to liaise among the various categories of banks and gather their opinions in order to prepare the decisions of the FBF's Executive Committee in the banking and financial fields.
Source : AFB
Compilation, as of the
Source : FGDR
Accounting date on which the Aggregation of the customers’ bank accounts occurs. It is the date on which the ACPR determines that the credit institution is no longer able to return, immediately or in the near future, the funds that it received from the public under the legislative, regulatory or contractual conditions applicable to their return (Day “D”).
Source : FGDR
Aggregation that covers the entire licensed legal entity affiliated with the FGDR. It is done:
1/ For the “legal entity”, i.e. the credit institution (legal entity) that is declared to have failed. The legal entity itself consolidates the data of its branches (in the legal sense of the term, entity without an independent legal status);
2/ At the level of each licensed credit institution, and in particular each Caisse d’Epargne and each Banque Populaire for the BPCE Group and each Caisse Régionale of the Crédit Agricole Mutuel Group for the Crédit Agricole Group, since the licence is issued at this level;
3/ At the level of each individually licensed credit institution and at the level of the entity that has the collective licence for the Caisses Fédérales for the Crédit Mutuel network (bank code). For each of these entities, Aggregation of the customers’ data must include all the banks that benefit from the entity's collective licence;
4/ For the French branches of institutions whose head office is located outside the EEA, when these branches are direct members of the FGDR.
Source : FGDR
AMC - Asset management company
Under Article L. 532-9 of the French Monetary and Financial Code, an asset management company is an investment firm which primarily manages individual or collective portfolios of financial instruments on behalf of clients.
This management can be provided for:
- Undertakings for Collective Investment in Transferable Securities (UCITS), i.e. Open-End Investment Companies (SICAV) and Mutual Funds (FCP);
- private or institutional clients.
This activity requires authorisation from the Financial Markets Authority (AMF ) and the drafting of a written mandate. To issue this authorisation, the AMF checks various criteria related to the company’s form, capital and the quality of its management.
AMF - Financial Markets Authority
Created by lawmakers in 2003, the Financial Markets Authority (AMF ) regulates participants and products in France's financial markets. It regulates, authorises, monitors and, where necessary, conducts investigations and issues sanctions. In addition, it ensures that investors receive material information and provides a mediation service to assist them in disputes.
Source : AMF
Source : FBF
ASF - French Association of Finance Companies
Association created to represent finance companies and specialised banks vis-à-vis the supervisory authorities and the various consultative bodies. The French Association of Finance Companies (ASF) defends specialised activities in the field of credit, financial services and investment services. It has 290 members - finance companies, specialised banks and investment firms. The services offered by the ASF include legal and economic information, consultation among members and professional activities with national and European authorities.
Source : ASF
Category of credit institution authorised by law to carry out all banking transactions. Banking transactions include the receipt of funds from the public, credit operations and bank payment services (including the issuance of cheque books).
Bank account identification document (RIB)
Document used in France to identify the details of a customer’s account. The RIB includes the name of the account holder(s), bank name, bank code, branch code, account number and check digits. The RIB is generally found on the bank account statement and/or in the cheque book. It also includes IBAN and BIC codes. Customers may send the RIB to all their debtors or creditors to allow transactions (bank transfers, direct debits, interbank payment orders, etc.) to be carried out on their account. BIC and IBAN codes are used to identify a bank account and are required for automated processing of bank transfers and direct debits in France and abroad.
Source: Les clés de la banque
Bank account statement
Provided in paper format or on a durable medium (i.e. in electronic format), an account statement is a document that summarises the transactions carried out on a customer's account during a given period, generally monthly.
Entity directly related to a company or group of companies. Unlike a subsidiary, a branch does not have a legal personality. However, a branch has a certain degree of management and administrative independence from its parent company. For example, a banking facility can be a branch.
Source : FGDR
Debit interest collected by the bank, generally for an account overdraft, calculated based on the amount, duration and interest rate of the overdraft, plus fees and commissions.
Source : FBF
The bank code is also called the bank identification code (CIB). It consists of five digits and is indicated on every bank account identification document (RIB). This code is unique to each credit institution licensed by the ACPR .
Bank secrecy, a form of professional secrecy, is a legal obligation, for the bank and its employees, not to disclose any information regarding its customers to a third party. Secrecy may be waived under very strict conditions at the request of certain administrative or judicial authorities.
Operation whereby funds are transferred from one account to another. Written order given by customers to their bank or payment institution to debit a specified amount from their account in order to credit the creditor’s account.
A bank transfer can be occasional or ongoing.
It may be executed immediately or on a scheduled date and requires the account information of the creditor receiving the transfer (bank details, BIC and IBAN codes).
Appointed by each bank, the ombudsman is an independent, impartial person who is bound by confidentiality and responsible for recommending an amicable solution to disputes that arise between individuals and their bank. After taking all other actions (appeals) with the branch and the institution’s customer service department, individuals may contact their institution's ombudsman, free of charge, for matters relating to the operation of their account, credit transactions or savings transactions.
Source : Les clés de la banque
Banque de France
In addition to the tasks of implementing the monetary and financial policy and banking supervision, the
As regards the FGDR, the beneficiary of a bank account is a person who has a right to the account as a result of their legal, tax or financial situation or a family relationship with the account holder. Such accounts include those opened by a professional in order to deposit funds belonging to other individuals who are the beneficiaries, for example, an account opened by a property management company for the management of co-owned buildings or a lawyer's CARPA account.
Beneficiary of compensation
Person to whom the compensation is sent (in the case of deceased individuals, insolvency proceedings or any other situation where the compensation is sent to a person who is not the account holder).
Business bank account
Bank account that allows holders to manage their day-to-day business activity. It is used to separate business transactions from personal transactions to avoid any tax or accounting confusion. Not all companies are required to open a business bank account. However, companies with share capital (one-person limited liability companies (EURL), limited companies (SA), simplified joint-stock companies (SAS), limited liability companies (SARL), etc.) must open a business bank account at the time of their creation.
Note: for professionals who have not created an EURL or EIRL, their compensation is calculated by adding up all their personal and business accounts up to the limit of €100,000.
Sources: Ministry of the Economy and FGDR
Account associated with a securities account which is used for all cash movements relating to the financial instruments.
Source : FGDR
CEL - Compte d'Epargne Logement home savings plan
Regulated savings product that allows the holder to obtain a loan, at the end of a minimum savings period, to finance expenses related to purchasing a primary residence or, under certain conditions, homes which have another purpose. The amount of the home savings loan is based on the savings amount and term. The interest rate of the loan is set by the public authorities. The money earned on a CEL consists of an interest rate and a government premium, which is paid only if a loan is granted. The funds deposited into a CEL are available at any time.
central bank money
Source : FBF
Central Securities Depository
Central securities depositories are infrastructures that maintain the integrity of the issue of securities by ensuring that securities cannot be accidentally or fraudulently created or cancelled. The central securities depository authorisation is granted by the AMF on the advice of the Banque de France and other European authorities depending on the type of activity involved.
Source : AMF and
Asset provided as security by a debtor to a lender when taking out a loan. If the debtor defaults, the lender has the right to keep the assets provided as collateral as compensation for the financial loss sustained by it.
Source: La Finance Pour Tous
Indemnification paid to a person for the prejudice (damage) they have sustained.
Maximum compensation amount that may be received.
Source : FGDR
Compensation letter sent by the FGDR
Source : FGDR
This is the financial participation of the organizations that adhere to the missions of the FGDR under the guarantee mechanisms and systems.
The corporate form can be identified as a type of company. For example, this notion includes limited company (SA), simplified joint-stock company (SAS), single member simplified limited company (SASU), limited liability company (SARL), one-person limited liability company (EURL), etc.
Source : FGDR
Legal proceedings that allow the sale of assets and the settlement of liabilities of a merchant, company or tradesperson that is in suspension of payments, in order to pay its creditors.
Card that allows its holder to pay for purchases and/or make withdrawals by means of credit previously and contractually defined with a credit institution. A credit card is linked to a revolving line of credit. Withdrawals and payment transactions are not debited from the account but are charged against the revolving credit amount.
Credit institutions include several types of institutions, particularly banks, as well as specialised credit institutions, which are mainly authorised to issue loans. Also called banks or banking institutions.
Person to whom a sum of money is owed. Also called recipient.
Virtual currency used for peer-to-peer exchanges of goods or services, generally independently of the banking system or any monetary policy, and which is issued and transacted based on blockchain technology.
A currency is the monetary unit of a country or an economic area.
Activity that entails registering financial instruments in their holder's name, i.e. recognising the holder's rights to said financial instruments, and providing custody of the related assets under conditions specific to each financial instrument.
Private individual or legal entity (eligible or non-eligible for the FGDR’s guarantee schemes) that holds one or more accounts at an FGDR Member Institution.
Source : FGDR
Customer account statement
Operation by which the bank determines an account's position on a given date. When the account is closed, this is referred to as a final account statement.
Source : Les clés de la banque
Customers insufficiently identified
When the customer's contact information is insufficient or the bank has lost track of the customer, the FGDR's compensation letter is returned as “undeliverable”. The FGDR then attempts to contact the depositor using the means at its disposal based on the file sent by the institution. Compensation is suspended until the holder can be identified or located.
Source : FGDR
Loss, destruction, bodily injury, loss of revenue.
Card issued by a bank or payment institution which enables its holder to make payments at stores or online as well as cash withdrawals at cash machines. A debit card can be national or international. There are several types of debit cards: immediate debit card, automatic authorisation debit card (CPAS) and deferred debit card.
Deceased customers, successoral undivided co-ownerships
So long as an estate has not been settled, deceased customers are treated as full holders and are covered by the deposit guarantee scheme on their own, independently of their heirs. For compensation, the FGDR contacts the notary responsible for the estate. If there is no designated notary, the FGDR may assign the procedure to its own notary.
Non-payment by a debtor of an amount due by the agreed date.
Source: Les clés de la banque
Ordinary deposit account used to manage cash assets. A card and cheque book are generally linked to this type of account. All rules relating to fees and operation of a demand account are described in an account agreement available from the customer's banking facility.
Deposit into a non-interest-bearing demand account. (e.g. checking account).
Funds or securities entrusted to a bank to be held and returned under specific terms and conditions.
Source: Banque Info
Account used to manage money on a daily basis. A customer's bank card and/or cheque book are generally linked to this type of account. The account must have a credit balance, unless the bank agrees otherwise. Also called bank account, checking account or demand account. The term current account is also used, but incorrectly.
Deposit guarantee scheme
The mechanism that compensates depositors within 7 days, in an amount up to €100,000 per person, per institution, if the institution where their assets are held is no longer able to meet its commitments.
Legal entity or natural person that is a customer of a bank or credit institution and deposits money into a deposit or savings account.
See definition of Customer .
Divided accounts (beneficial interest/bare ownership)
Ownership of these accounts has been divided between bare ownership and beneficial interest through a specific agreement. The beneficial owner (or the undivided co-ownership of the beneficial owners) receives the compensation and is responsible for repaying the bare owner. The compensation paid to beneficial owners is separate from the compensation for which they may also be eligible with respect to their other accounts.
EBA - European Banking Authority
Autorité Bancaire Européenne in French.
Independent EU authority which works to ensure effective and consistent prudential regulation and supervision across the European banking sector.
It replaced the Committee of European Banking Supervisors (CEBS) on 1 January 2011.
ECB - European Central Bank
The European Central Bank (ECB) is an official EU institution at the heart of the Eurosystem as well as the Single Supervisory Mechanism for banking supervision.It works with the national central banks within the Eurosystem on banking supervision and with the national supervisors within the framework of the Single Supervisory Mechanism.
An economic crisis is an imbalance between economic variables, particularly production and consumption. Economic crises result from a breakdown in the relationships among the various elements of the economic system.
The currencies of the European Economic Area are:
1/ EURO: Germany, Austria, Belgium, Cyprus, Spain, Estonia, Finland, France, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovakia and Slovenia.
2/ CFP Franc: New Caledonia, French Polynesia and Wallis and Futuna.
3/ Other currencies of the European Economic Area countries:
- Bulgarian Lev (BGN) - Bulgaria
- Czech Koruna (CZK) - Czech Republic
- Danish Krone (DKK) - Denmark
- Hungarian Forint (HUF) - Hungary
- Icelandic Krona (ISK) - Iceland
- Estonian Kroon (EEK) - Estonia
- Croatian Kuna (HRK) - Croatia
- Norwegian Krone (NOK) - Norway
- Polish Zloty (PLN) - Poland
- Romanian Leu (RON) - Romania
- Pound Sterling (GBP) - United Kingdom
- Swedish Krona (SEK) – Sweden
Electronic money institution (EMI)
A legal entity, other than credit institutions and other than the persons mentioned in Article L. 525-2 of the Monetary and Financial Code (Banque de France , the Institut d’Émission des Départements d’Outre-Mer, the Public Treasury and the Caisse des Dépôts et Consignations) that issues and manages electronic money in the normal course of its business (Article L. 526-1).
This refers to customers and/or deposits covered by the deposit guarantee scheme within the meaning of the applicable regulations.
Environmental, social and governance (ESG) criteria are the three central factors in measuring the sustainability and ethical impact of an investment in a company or economic area.
These criteria help to determine a company’s societal contribution and to enlarge and enrich the analysis of future financial performance of companies (return and risk).
European Economic Area (EEA)
As of 12 April 2014, the European Economic Area consisted of the 28 EU countries and three EFTA countries: Germany, Austria, Belgium, Bulgaria, Cyprus, Croatia, Denmark, Spain, Estonia, Finland, France, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Czech Republic, Romania, United Kingdom, Slovakia, Slovenia, Sweden, Iceland (EFTA), Norway (EFTA) and Liechtenstein (EFTA).
The excess, or deductible, is the initial amount of damage not paid by the insurer when paying compensation.
For example, with a €500 excess, a claim for which the damages amount to €20,000 results in a payment of €19,500 to the beneficiary.
The excess that applies to the FGDR’s performance bonds guarantee is €2,000 of the amount of the harm sustained.
FCP - Mutual Fund
A UCITS that issues units but which, unlike a company – such as a SICAV (open-end investment company) – does not have a legal personality. An investor who purchases units becomes a member of a co-ownership of financial instruments but has no voting rights. The investor is not a shareholder. An FCP is represented by a management company, which provides administrative, financial and accounting management.
FGAP - Guarantee scheme for policyholders that protects against the failure of personal insurance companies
Guarantee scheme created in 1999 which is designed to protect the rights of policyholders, subscribers, members and beneficiaries of life insurance and capitalisation policies covering bodily injury in the event that an insurance company fails.
FGDR functional requirements
Document that provides all the information that the Member Institutions need to produce the SCV in accordance with the applicable and draft regulations.
Money used in the form of coins and notes (cash).
A financial crisis occurs when there is an imbalance between the real sphere (goods and services) and the financial sphere (banks and stock market) of the economy.
All securities including stocks, debt instruments (including bonds), units or shares of investment funds (see UCITS) and financial contracts.
System used by the FGDR member institutions to identify the eligibility, exclusion or “special cases” in the Single Customer View (SCV) file which they send annually for control purposes.
Commitment made by a person to pay the debt of a debtor if the debtor fails to do so.
Bank products that combine two products: a savings account guaranteed by the French government (Livret type “A” or Livret type “Bleu” savings account , LDDS, LEP) and a traditional current or savings account covered by the deposit guarantee scheme. The FGDR compensates the first account in full under the French government guarantee and adds the second account to the other deposits in order to calculate the compensation under the deposit guarantee scheme. Each account appears in the relevant compensation statement.
Source : FGDR
IBAN - International Bank Account Number
International standard for identifying bank accounts. The IBAN ensures the identification of each customer bank account. It is made up of the country code of the country in which the account is located (FR for France), two check digits and the national account identifier (the bank details for France). The length of the identifier varies depending on the country. In France, an IBAN consists of 27 characters.
These are accounts for which there has been no transaction and whose holder has not been heard from for more than a year, or for more than five years for term accounts and passbook accounts. The FGDR attempts to contact the holder and, if it fails to do so, pays the compensation to the Caisse des Dépôts et Consignations (www.ciclade.fr) in the holder's name.
Refers to Customers and/or deposits that are not covered by the deposit guarantee scheme within the meaning of the applicable regulations.
Credit institution that carries out all or some financial market activities: origination, financial analysis, sales, execution and trading, investment, custody and other post-trade activities, merger-acquisition. This type of institution, closely monitored by various supervisory authorities (Financial Markets Authority, Credit Institutions Committee and Banking Commission), may have the status of a bank (credit institution) or investment firm. An investment bank does not receive funds from the public, but finances itself by borrowing from commercial banks.
Generic term that encompasses legal entities that provide investment services as defined in Article L. 321-1 of the Monetary and Financial Code.
Services and activities relating to financial instruments.
- reception and transmission of orders on behalf of third parties;
- execution of orders on behalf of third parties;
- proprietary trading;
- portfolio management on behalf of third parties;
- investment advice;
- guaranteed investment;
- non-guaranteed investment;
- operation of a multilateral trading facility.
investor Compensation Scheme
The mechanism that compensates investors, in an amount up to €70,000 per person, per institution, for securities (stocks, bonds, units of UCITS) and other financial instruments which their investment services provider is unable to return to them in case of failure, and for the associated cash. Learn more: “Discover my guarantees”.
ISP - Investment services provider
Investment firm and credit institution that has received authorisation to provide investment services. ISPs provide investment services in the normal course of their business, including in particular the reception and transmission of orders on behalf of third parties, the execution of orders on behalf of third parties and proprietary trading. See also Investment services .
Source : FGDR
Joint account (Multiple owners account)
Account opened in the name of several people. In a joint signatory account, the co-holders complete transactions on the account together. In a single signatory account, each of the co-holders can complete transactions on their own.
Source : FBF
Joint signatory account
Joint account opened in the name of several people. The consent and signature of all co-holders are needed to complete transactions on the account (no individual holder is entitled to claim full payment of the funds).
Joint tenants account (joint account)
Multiple owners account opened in the name of two or more people who are not necessarily bound by a family relationship or alliance, called co-holders. To open a joint account, the co-holders must sign an account agreement. Any of the co-holders may complete debit and credit transactions on the account on his own – exactly as if he were the sole account holder – including deposits and withdrawals of funds, cashing of cheques, bank transfers, direct debit authorisations, etc.
LDDS - Livret Développement Durable et Solidaire (formerly LDD)
Regulated savings product available only to persons whose tax residence is in France. The funds deposited are available at any time. An LDDS account has an unlimited term. However, it may be closed at any time by the account holder. Only one LDDS account may be opened per taxpayer plus one for their spouse. The interest paid on an LDDS account is tax-exempt. The maximum amount that can be deposited into an LDDS account is currently €12,000.
Group of individuals that is recognised as having a legal personality separate from that of its members and is a subject of law. A distinction is made between public legal entities: central government, departments, communes, regions, public institutions and private legal entities (companies, trade unions, professional bodies, associations).
LEP - Livret d’Épargne Populaire
Regulated savings product available only to individuals whose tax residence is in France and whose income tax does not exceed an amount that is revised each year. The funds deposited into an LEP account are available at any time. The term of an LEP account is unlimited so long as the tax ceiling requirement is met. However, it may be closed at any time by the account holder. Only one LEP account may be opened per taxpayer plus one for their spouse. Children included in the tax household may not hold this type of account. The interest paid on an LEP account is tax-exempt. The maximum amount of deposits is €7,700.
Life insurance policy
Contract by which the insurer makes a commitment, in return for the payment of contributions or premiums, to pay to the policyholder, the subscriber or their designated beneficiaries a lump-sum payout or an annuity in the event of the death or survival of the policyholder, based on the terms and conditions defined in the policy. Life insurance policies are subject to a specific tax regime. Policies may be issued to an individual or a group. The Fonds de Garantie des Assurances de Personnes (FGAP) covers these products taken out with insurance companies.
Limited liability individual business owner (EIRL)
A limited liability individual business owner (EIRL) is an option that allows Individual Business Owners to allocate assets to their business, and thereby separate their personal assets from their business assets, without creating a legal entity. However, its legal status and the separation of assets make it comparable to a legal entity. Individual Business Owners use a company name that includes their name, preceded or immediately followed by the words: Limited Liability Individual Business Owner or the initials EIRL. (Law no. 2010-658 of 15 June 2010 on Limited Liability Individual Business Owners).
Trustee appointed by the court in proceedings involving the court-supervised reorganisation or liquidation of a company.
Livret Jeune savings account
Regulated savings product available only to individuals aged 12 to 25 who reside in France. For those under age 16, withdrawals from a 'Livret Jeune' savings account must be authorised by their legal representative. A 'Livret Jeune' savings account is closed by no later than 31 December following the account holder's 25th birthday and the credit balances are transferred to another account designated by the account holder. The interest paid on a 'Livret Jeune' savings account is tax-exempt. The interest rate is set by the credit institutions and may not be lower than the Livret type “A” rate.
Livret type “A” savings account
Regulated savings account that can be opened by any individual and by certain associations. The funds deposited are available at any time. A Livret type “A” savings account has an unlimited term. However, it may be closed at any time by the account holder. Only one Livret type “A” savings account may be opened per person (including minors). The interest paid on a Livret type “A” savings account is tax-exempt. The maximum amount that can be deposited by an individual into a Livret type “A” savings account is €22,950.
Livret type “Bleu” savings account
Regulated savings account available in the Crédit Mutuel network. As of 1 January 2009, it is no longer possible to open a Livret type “Bleu” savings account . However, accounts existing as of that date remain in effect. A Livret type “Bleu” savings account is similar to a Livret type “A” savings account . A person may not have a Livret type “A” savings account and a Livret type “Bleu” savings account at the same time.
Market value (or Fair value)
Price at which an asset can be sold if an active open trading market exists.
Credit institutions or branches of institutions whose head office is located outside the EEA, which are licensed in France (the word France covers mainland France, the overseas departments, the Territorial Collectivity of Saint Pierre and Miquelon, the Departmental Collectivity of Mayotte, the Principality of Monaco, the overseas territories and New Caledonia).
This is an equity security that does not grant a right to the FGDR's reserves.
Market in which the economic operators negotiate with each other on their short- and medium-term capital requirements and surpluses. It includes the interbank market reserved for credit institutions and the negotiable debt securities market open to all economic operators.
National resolution fund
The national resolution fund is called in to finance the resolution of credit institutions having their registered offices in the Overseas Countries and Territories, branches of credit institutions from third countries, investment firms subject to an initial share capital requirement of at least 730,000 euros that do not come under the Single Resolution Fund (SRF), as well as Monegasque credit institutions.
In accordance with European legislation, the target amount of this fund to be met by 2024 is at least 1% of the guaranteed deposits in all member institutions. For all institutions, the NRF is expected to have resources of over €60 million by 2024.
Net asset value
Price of a unit or share of a UCITS. This value is obtained by dividing the total value of the net assets of the UCITS by the number of units or shares. The net asset value must be published and made available to anyone requesting it. This value can fluctuate upwards or downwards.
1/ A legal relationship between two persons whereby one of them, the creditor, may demand that the other, the debtor, perform a service or refrain from taking an action (positive obligation, negative obligation and obligation to pay a sum of money).
2/ Financial instrument issued by a company, a public authority or the central government. It is a debt security (i.e. it represents a debt) that earns interest and is payable on a date and in an amount set in advance. During its term, the value of a bond fluctuates upwards or downwards. Sale prior to maturity may result in capital gains or losses.
OCBF - Office de Coordination Bancaire et Financière
Independent professional organisation working closely with the financial markets whose members include banking and finance professionals.
See the website www.ocbf.com
Source: Office de Coordination Bancaire et Financière
An official bulletin (bulletin officiel or BO) is an official publication issued by the French government to announce new developments regarding proposed laws, as well as less important texts (decrees, circulars, memoranda, notices of vacant posts, announcements of legal proceedings, etc.).
The activity carried out by an investment services provider (ISP) is called order reception-transmission on behalf of third parties. This provider transmits orders to trade financial instruments to an authorised service provider for their execution on behalf of a principal.
Source: La Finance Pour Tous
Particular or Complex Situations
Cases where some or all of the processing of private individuals or legal entities must be done separately by the FGDR in a timeframe that exceeds the normal 20-day period due to the special processing needed before any compensation can be paid.
Payment institution (PI)
A legal entity, other than a credit institution, that has received authorisation from the Credit Institutions Committee (CECEI) to provide payment services in the normal course of its business.
PEE - Company Savings Scheme
Type of employee savings scheme in which the sums paid by employees are blocked for at least five years, except in cases of early withdrawal. Capital increases reserved for employees generally occur through a PEE. The income and capital gains are exempt from income tax but are subject to social security charges.
PEL - Plan d’Épargne Logement home savings plan
Regulated savings product that allows loans to be issued to finance expenses related to purchasing a primary residence or, under certain conditions, homes which have another purpose. Unlike a home savings account, a PEL has a minimum term of four years and a maximum term of 10 years. After that time, the plan can continue to exist but payments can no longer be made to it. The savings interest rate is set for the entire term of the plan at the rate in effect when the PEL was opened. The money earned on a PEL consists of an interest rate and a government premium. For plans opened after 12 December 2002, the payment of the premium is linked to the loan being granted. The maximum amount of deposits is €61,200.
PEP - Plan d’Épargne Populaire savings plan
Regulated savings product. Since 2003, it is no longer possible to open a new PEP; however, existing PEPs remain in effect and funds can be deposited into them up to the maximum deposit amount (€92,000). At the end of the plan, the holder may receive a lump-sum payout or a life annuity.
PERCO - Plan d’Épargne Retraite Collectif (Collective Pension Savings Scheme)
Collective savings scheme which allows the employees of a company or group of companies to save, in some cases with help from their employer, by investing in transferable securities. Employees enjoy favourable tax treatment in exchange for their savings being blocked, generally until retirement age. The sums paid are therefore blocked until the employee retires, barring exceptional circumstances explicitly provided by law.
performance Bonds Guarantee
The compensation mechanism that covers performance bonds given by credit institutions in favour of business professionals. The FGDR takes the place of a failed institution when it is no longer able to honour, vis-à-vis the public, the performance bonds issued by it in favour of business professionals who are required by law to provide a guarantee to their customers. Learn more: “Discover my guarantees”.
PERP - Plan d’Epargne Retraite Populaire (Individual Pension Savings Scheme)
Group life insurance policy through which savings are built up over a long period of time, leading to the payment of a life annuity upon retirement. The savings are available at the time of retirement in the form of a lump-sum payout only for the purchase of a primary residence (first-time home ownership). In addition to the life insurance regulations applicable to PERPs, the operation of this scheme is subject to specific provisions. Under certain conditions, a PERP offers an upfront tax advantage (deduction of the payments made).
As opposed to a business account.
Persons prosecuted for money laundering or whose assets are frozen
The compensation of deposits of persons prosecuted for reasons relating to money laundering/terrorist financing is suspended until the end of the proceedings against such persons. Compensation will be paid only if the accused person is not convicted. Compensation is also suspended in case of an asset freeze or embargo.
The individual as opposed to a legal entity. Certain rights are common to both legal entities and private individuals, while others are specific to one category.
Private individuals or legal entities subject to moratorium or insolvency proceedings, accounts managed by a nominee
If a nominee has been appointed and has the power to manage the accounts in place of the customer, the compensation is paid to the nominee. Compensation is paid to customers who have retained the right to manage their accounts.
Processing of ongoing transactions
Determination of the fate of transactions that were initiated prior to the Aggregation Date but which are to be settled after that date and must be either added to or removed from the basis of any compensation.
Person to whom or to whose order a cheque, bank transfer, etc. must be paid.
Source: Les clés de la banque
Formality that results in a court “hearing and determining” a dispute.
Remote banking (services)
Services provided by a bank which may or may not have a banking facility or a place where it receives customers and which uses new technologies (Internet, telephone, etc.) to complete all or some transactions on a bank account remotely. Also called online banking.
RIE - Information Returned to Sender
La Poste's PND (undeliverable mail) service (formerly NPAI - Not At This Address) has been renamed RIE - Information Returned to Sender .
Savings account (or Passbook Account)
Savings product that does not have a regulated interest rate or a maximum deposit amount. The funds deposited into this type of account are available at any time. The account has an unlimited term and may be closed at any time by the account holder. The interest paid on this type of account is subject to tax and social security charges.
Money transferred from one bank account to another by book entry. In practice, it includes all transactions that are not in cash.
Secured accounts (pledge, escrow)
1st case: Pledge and escrow in favour of the failed bank: no compensation paid by the FGDR;
2nd case: Pledge in favour of third parties: compensation paid by the FGDR to the account holder;
3rd case: Escrow in favour of a legal or judiciary third party: compensation paid by the FGDR to an account opened at another institution reproducing the escrow conditions.
Account in which the financial instruments (stocks, bonds, UCITS, etc.) held by the account holder are registered. Cash movements are not recorded in the securities account; these movements (debits for purchases of securities, credits following sales of securities, dividend payments, etc.) are recorded in the account holder's cash account.
All the securities held by a person.
Security or financial instrument
General term that refers to stocks and bonds, among other things. In the context of banking, it refers to a transferable security.
Banks sometimes identify some of their customers as “sensitive” individuals, which means that special precautions are taken regarding access to information concerning them. Where this is the case, the institutions are asked to upload this information.
Source : FGDR
SICAV - Open-end investment company
Undertaking for Collective Investment in Transferable Securities (UCITS) which has a legal personality (company) and issues stocks or bonds, negotiable debt securities and other financial instruments authorised either by the regulations or the articles of association of the SICAV. Any person who invests in a SICAV becomes a shareholder and can vote at shareholders’ meetings. A SICAV can manage itself or, as is more often the case, entrust this function to a UCITS management company .
Single Resolution Fund (SRF)
The Single Resolution Fund, which is managed by the Single Resolution Board, is used to finance the resolution of:
• all credit institutions whose head office is located on French territory, excluding overseas countries and territories (notion in European law that covers Member States’ territories and collectivities that are not party to the European Union. In the case of France, this means Wallis and Futuna, French Polynesia, New Caledonia, Saint Pierre and Miquelon and Saint Barthélemy);
• all investment firms whose head office is located on French territory, excluding overseas countries and territories, and subsidiaries of a “significant” credit institution under the European “SSM” mechanism, which are required to have initial capital of at least €730,000.
In accordance with European legislation, the target amounts to be met by both funds by 2024 are at least 1% of the covered deposits of all member institutions.
According to SRF estimates, the funds are expected to reach €55.7 billion by 2023. 40% of the funds collected by the SRF were mutualised as of 2016, with this figure rising to 60% in 2017 and 70% in 2018.
SME - Small or Medium-Sized Enterprise
The Small and Medium-Sized Enterprises (SME) category includes companies that employ fewer than 250 people and generate annual revenue of less than €50 million or have a total balance sheet of less than €43 million. (Decree no. 2008-1354 of 18 December 2008).
Source : FGDR
Special compensation cases
Cases where some or all of the processing of deposits must be done separately by the FGDR in a timeframe that exceeds the normal 7-day period due to the special processing needed before any compensation can be paid.
Stock market crash
A crash is a sudden and large-scale fall in the prices of one or more asset classes. It refers to a collapse in share prices in one or more financial markets.
Source: Ministry of the Economy
Substitution of one person (personal subrogation) or one thing (real
Institution whose capital is more than 50% owned by another company (the parent company) from which it is legally separate but on which it is economically and financially dependent.
Suspension of payments
Deposit account in which the funds are blocked for a certain time period in return for an interest rate stipulated when the account is opened. The interest paid is subject to tax and social security charges. Also called fixed-term deposit.
As opposed to a demand deposit, a deposit with a specified term and contractual interest rate. The cash funds are therefore blocked until the end of a given term. Generally speaking, the return of the blocked funds may not be requested before the end of the term specified in the contract signed between the customer and the bank (without penalties). In return for the funds being blocked, the customer receives an interest rate similar to that of the money market rate.
Cut-off time for inclusion of the failed institution's Customer transactions; in principle, it is the processing cut-off time of an accounting day.
Security issued by public or private legal entities (for example, a company, SICAV, central and local governments) which provides access, directly or indirectly, to a portion of the issuer's capital or to a right to claim. Stocks, bonds and units of mutual funds are examples of transferable securities. The term “transferable security” has been replaced by “financial instrument” in the Monetary and Financial Code.
The trust, along with its associated accounts, is treated as a person in its own right. It receives up to €100,000 in compensation under the deposit guarantee scheme, independently of the holder of the account(s) (the trustee), the settlor of the trust and their beneficiary.
UCITS - Undertaking for Collective Investment in Transferable Securities
Term that encompasses open-end investment companies (SICAV) and mutual funds (FCP). These entities manage portfolios of financial instruments (or securities) and issue units or shares which may be subscribed for by individuals or companies. UCITS are authorised by the Financial Markets Authority (AMF ) (or a European regulator) and must comply with management and investment rules. UCITS offer the possibility, particularly for individuals, to access a portfolio of diversified financial instruments managed by a professional. Also called collectively managed savings products.
UCITS management company
Company that manages’ UCITS i.e. carries out activities such as UCITS portfolio management and administration and, at times, marketing of units or shares.
Management companies are subject to AMF authorisation. The list of authorised management companies can be viewed on the AMF website.
The inability of an owner to temporarily access their property due to an agreement, a court decision or a legal provision.
The unavailability of deposits is the time at which the customers of a banking institution cannot access their deposits. This unavailability determined by the ACPR immediately initiates the customer compensation process by the FGDR.
Source: Les clés de la banque
With respect to the initiation of the FGDR’s deposit guarantee scheme, this is the date on which the ACPR declares that an FGDR member bank is no longer able to return assets to customers. This date is declared as the “unavailability date” and marks the start of the customer compensation process and the appointment of a bank liquidator .
Undivided co-ownership accounts
An account opened in the name of “X and Y” is an undivided co-ownership account. The undivided co-ownership is treated as a separate person from its members. It is considered a separate customer and is compensated up to €100,000 separately from its members.
An unsecured creditor is a creditor that does not have any specific guarantee (lien, pledge, mortgage) which allows it to be paid before other creditors from the proceeds of the sale of the debtor's assets. Only the debtor's present and future assets serve as a guarantee of payment of its claim. If an unsecured creditor is not paid, it may have the debtor's assets sold in order to be paid from the proceeds of the sale; however, it will be in competition with all the other creditors, particularly the preferential creditors.
Source: Service Public
Transaction whereby customers withdraw a certain amount of cash from their account either at an cash machine or at the counter at their bank or payment institution. A withdrawal authorisation limit, as specified in the account agreement or the payment services master agreement, is applied over a seven-day period.