Changes To The Asset Management Framework In France

Ordinance No. 2017-1432 dated Oct. 4, 2017 (the Ordinance), together with its two implementing decrees dated Nov. 19, 2018, is bringing significant changes to the French legal framework for asset management and direct lending.

In addition to the already existing specialized professional funds¹ ­(SPF) and securitization vehicles² (SV), the Ordinance introduces a new type of alternative investment fund (AIF), under French law referred to as specialized financing vehicles³ (SFV).

SFV will combine the regulatory advantages of both SPF and SV in terms of asset mix (e.g., SFV, unlike SV, may hold equity, quasi-equity or tangible assets), liability structure (e.g., SFV, unlike SPF, may issue debt securities), investors' protection (e.g., insolvency proceedings as well as seizure and attachment proceedings do not apply to SFV, while they do apply to SPF) and marketing within the EU (shares or units of SFV may be marketed within any EU member state under the "marketing