Ashurst Paris November 2012

Recommendations on the marketing of term deposit accounts (comptes terme)

The French banking regulator, the Autorit de Contrle Prudentiel ("ACP") published recommendations on the marketing of term deposit accounts on 12 October 2012 (the "Recommendations"). apply to The credit Recommendations
apply to term deposit accounts. These general provisions, in particular, require that the Entities provide information to their clients before the clients enter into the contract and the Entities do not use unfair practices, which are defined as practices that do not comply with the requirements of professional diligence and affect (or may affect) the economical behaviour of the customer who is normally informed and reasonably attentive and sensible. The Entities must also comply with the provisions relating to distance selling of financial services and banking and financial solicitation. The purpose of the Recommendations is to enhance the information provided by the Entities to NonProfessional Investors who open or hold a term deposit account. The quality of information must be improved at three stages - in the advertising documents, in the pre-contractual information and in the periodic information provided to NonProfessional Investors.

institutions and intermediaries in banking operations and payment services which operate in France (including entities which act in France on a cross-border basis or through a French branch) (the "Entities") deposit when they to market term acting accounts individuals

outside their trade or profession ("NonProfessional Investors").

The Recommendations define the term deposit account (compte terme or dpt terme) as "an account in which funds are deposited and blocked for a certain period against a remuneration agreed at the time of the subscription". In an annex to the Recommendations, the ACP sets out the provisions which are currently applicable to term deposit accounts. Some are specific provisions which were previously drafted to govern term deposit accounts. These include the general decisions dated 8 May 1969 and Regulation no. 8613 dated 14 May 1986 of the French Comit National du Crdit which, in particular, set out that: the funds must be blocked until the end of the period specified at the subscription of the contract; the account must be opened for at least one month; the credit institution may freely compensate the funds received on a term deposit account with a maturity of at least one month; and a separate term deposit account must be opened for each term deposit account transaction. Other applicable provisions attached to the Recommendations are general provisions of the French Civil Code and of the French Monetary and Financial Code which also

Advertising documents The Recommendations set out that the Entities should provide a well-balanced view of the term deposit account and should not focus on the most favourable features of the term deposit account to the detriment of features which would be less favourable In to the Nonthe Professional Investor. particular,

Recommendations list the elements that should appear in all advertising communications and communications which refer to the remuneration of the term deposit account (e.g. the consequence of an early withdrawal, the duration of the contract and the existence of fees etc.).

Pre-contractual information The ACP recommends that the Entities provide Non-Professional Investors with a separate document which contains clear, apparent and understandable information before the NonProfessional Investors enter into the contract.

AUSTRALIA BELGIUM CHINA FRANCE GERMANY HONG KONG SAR INDONESIA (ASSOCIATED OFFICE) ITALY JAPAN PAPUA NEW GUINEA SINGAPORE SPAIN SWEDEN UNITED ARAB EMIRATES UNITED KINGDOM UNITED STATES OF AMERICA

The separate document must contain specific information such as the nature of the product, the financial conditions of the term deposit account, the conditions of the promotional offers (if any) and the way in which the term deposit account operates. However, pursuant to the Recommendations, there are cases where such a separate document is not necessary. These cases include offers in relation to a single term deposit account (which is not automatically renewable at maturity and/or associated with another term deposit account, saving product or financial service) with a fixed interest rate and penalties for early withdrawal and where a document setting out the pre-contractual information has already been drawn up in accordance with any existing applicable provisions. Please note that the European Commission published on 3 July 2012 a draft Regulation on key information documents for packaged investment products which deposits draft include which "structured" are not deposits, by a i.e. an determined that

to renew the term deposit account and the consequences in doing so. The ACP indicates that the Entities must be able to justify that adequate resources and procedures have been implemented in order that the NonProfessional Investors can understand, from the information they have been provided with, the nature, financial conditions and operating procedures of each term deposit account that has been marketed. The Recommendations apply from 1st June 2013.

Contacts Julien Bacus Partner T : +33 (0)1 53 53 53 63 E :julien.bacus@ashurst.com

interest rate (such as EURIBOR or LIBOR). The Regulation provides "Key Hubert Blanc-Jouvan Partner T : +33 (0)1 53 53 53 97 Information Document" (KID) must be produced by the manufacturers of the investment product and provided to retail customers when they are considering whether to buy packaged investment products.

E :hubert.blanc-jouvan@ashurst.com

Periodic information In relation to term deposit accounts with a floating rate, the Recommendations provide that the Entities should inform the NonProfessional Investor: (i) periodically, of the current status of the term deposit account, both where the term deposit account would be maintained until the term and where there would be an early withdrawal of the funds and (ii) within a time period appropriate to the features of the term deposit account, of the conditions for its renewal including the right not Marie-Fleur Rautou Associate T : +33 (0)1 53 53 54 55 E :marie-fleur.rautou@ashurst.com

This publication is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to. Readers should take legal advice before applying the information contained in this publication to specific issues or transactions. For more information please contact us at Ashurst LLP, Avocats au Barreau de Paris, 18, square Edouard VII, 75009 Paris T: +33 1 53 53 53 53 F: +33 1 53 53 53 54 www.ashurst.com. Ashurst LLP and its affiliated undertakings operate under the name Ashurst. Ashurst LLP is a limited liability partnership registered in England and Wales under number OC330252. It is regulated by the Solicitors Regulation Authority of England and Wales. Lawyers of Ashurst LLP who are members of the Paris Bar Association are regulated by the rules applicable to lawyers (avocats) practising in Paris, France. The term "partner" is used to refer to a member of Ashurst LLP or to an employee or consultant with equivalent standing and qualifications or to an individual with equivalent status in one of Ashurst LLP's affiliated undertakings. Further details about Ashurst LLP and its affiliated undertakings can be found at www.ashurst.com. Ashurst LLP. Ref:3580825 November 2012