Investment funds

 

Investment funds in France are categorised as "organisations for collective investment in transferable securities" (organismes de placement collectif en valeurs mobilières, OPCVM). They are savings vehicles with three fundamental characteristics:

• They give investors part-ownership of a portfolio of securities (equities, bonds, etc.) held jointly with other investors;
• The portfolio is managed by a professional;
• Units or shares in the fund may be redeemed for their net asset value.

Strict legal framework

 

Investment funds are covered by special legal and regulatory provisions set out primarily in the French Monetary and Financial Code and the regulations of the securities regulator, the AMF. These rules cover risk diversification and the transparency of periodic disclosures to investors, prospectus, and other information.

The regulations stipulate that all investment funds are subject to the supervision by the AMF.

 

 

• Investment ratios are aimed at limiting investment funds’ exposure to market risk (the risk of adverse developments in market conditions), credit risk (risk of default by the issuer or counterparty) and liquidity risk (risk of difficulties selling financial assets).

 

• Investor information must be clear and easy to understand. These rules of conduct have been reinforced by the European Union's Markets in Financial Instruments Directive (MiFID).

 

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