Autorité de contrôle prudentiel et de résolution

Overview

French Prudential Supervision and Resolution Authority

The Autorité de contrôle prudentiel et de résolution (ACPR) is France's integrated prudential supervisor for banking and insurance, with critical authority over payment service providers, electronic money institutions, and payment-related AML/CFT compliance. Established under Ordinance No. 2010-76 (January 21, 2010) through the merger of three predecessor authorities, the ACPR operates as an autonomous administrative entity within the Banque de France with a staff of 1,008 professionals.

For payment professionals, ACPR is the binding national licensing authority for:

• Payment institutions (établissements de paiement)
• Electronic money institutions (EMI)
• All payment service providers operating in France under the Code monétaire et financier (CMF)

The ACPR's mandate encompasses prudential regulation, licensing and authorization, AML/CFT compliance supervision, conduct of business rules, and resolution authority for failing financial institutions.

Basic Identity

Classification

Inclusion Justification

What This Entity Oversees

2. Legal Status & Regulatory Authority

2.1 Foundational Legal Framework

The ACPR operates under binding legal authority established by:

• Ordinance No. 2010-76 of January 21, 2010 — The founding ordinance that created the unified prudential authority and defined its powers, organizational structure, and competencies.
• French Code monétaire et financier (CMF), Articles L. 612-1 to L. 612-50 — Legislative articles that define the ACPR's governance, duties, composition of the College and Sanctions Commission, and procedures.
• EU Directives — The ACPR implements and enforces:
• Payment Services Directive 2 (PSD2) — Regulating payment services and third-party service providers
• Electronic Money Directive 2 (EMD2) — Governing e-money issuers
• Bank Recovery and Resolution Directive (BRRD) — Establishing resolution mechanisms (name-giving function)
• Insurance Recovery and Resolution Directive (IRRD) — Resolution framework for insurers (in implementation as of 2024-2025)
• Anti-Money Laundering Directives (AMLD5, AMLD6) — AML/CFT requirements and supervisor responsibilities

2.2 Administrative Status

The ACPR is an independent administrative authority (autorité administrative indépendante) with:

• Binding regulatory and supervisory authority over all credit institutions, insurers, payment institutions, EMIs, and intermediaries in France
• Administrative police powers exercised by the College
• Disciplinary powers exercised by the Sanctions Commission
• No independent regulatory (rule-making) power — regulatory powers rest with the French government and Parliament, though the ACPR issues binding supervisory guidance, instructions, and recommendations

2.3 European Integration

The ACPR operates within:

• Eurozone banking supervision — As France is in the Eurozone, the European Central Bank (ECB) directly supervises significant credit institutions (SIs) under the Single Supervisory Mechanism (SSM). The ACPR supervises less significant institutions (LSIs) under ECB oversight.
• European regulatory framework — All directives and regulations applicable to EU member states.
• Financial Stability in Europe — Coordination with ESMA (European Securities and Markets Authority) for conduct rules, and with EIOPA (European Insurance and Occupational Pensions Authority) for insurance matters.

4.1 Core Prudential Mission

The ACPR's statutory mission is to:

1. Safeguard financial stability — Protect the soundness of the French financial system, both at the individual institution level (microprudential) and system-wide level (macroprudential)
2. Protect consumer interests — Ensure that supervised entities treat customers fairly and comply with conduct of business rules
3. Ensure effective supervision — Examine applications for licenses, supervise authorized entities, monitor compliance with prudential and conduct requirements, and conduct on-site and off-site inspections

4.2 Specific Functions

Banking Supervision (Prudential)

• Authorizes credit institutions (banks, credit unions)
• Supervises capital adequacy under Basel III requirements
• Monitors liquidity risk management
• Conducts stress testing and capital planning reviews
• Supervises market risk, operational risk, and credit risk
• Oversees corporate governance and fit-and-proper assessments of board members and senior management

Insurance Supervision (Prudential)

• Authorizes insurance and reinsurance undertakings
• Supervises capital adequacy under Solvency II framework
• Monitors liability adequacy, governance, and risk management
• Supervises insurance distribution chains and intermediaries
• Implements IRRD requirements for recovery and resolution (in progress as of 2025)

Payment Institutions & EMIs

• Authorizes payment institutions under Article L. 314-1 of the CMF
• Authorizes electronic money institutions (EMI) under Article L. 521-1 of the CMF
• Supervises prudential compliance, including:
• Initial capital requirements
• Operating expense ratio and capital ratio requirements
• Fund safeguarding rules (segregation of client funds)
• Technology and operational resilience
• Issues Expectations Documents (Attentes de l'ACPR) for emerging sectors (e.g., crypto-asset services combined with payment services as of 2024)
• Conducts licensing examinations for compliance with European and French rules

AML/CFT Supervision

• Supervises all regulated entities' compliance with anti-money laundering and counter-terrorist financing obligations under Article L. 561-36 et seq. of the CMF
• Conducts off-site AML/CFT reviews via questionnaires and documentation requests
• Performs on-site AML/CFT inspections to assess systems, controls, and compliance
• Issues binding guidance on AML/CFT compliance
• Coordinates with TRACFIN (the French FIU) on suspicious activity reporting

Resolution Authority

• Acts as resolution authority for banks, insurance companies, and payment institutions under BRRD and IRRD
• Prepares and executes resolution plans for systemically important institutions
• Manages institution failures and market exits to minimize financial stability impact
• Operates the Resolution Fund (Fonds de résolution de l'Union bancaire) for bank resolution within Eurozone framework

Conduct of Business Oversight

• Supervises conduct of business requirements (consumer protection, fair dealing, disclosure rules)
• Oversees sales practices and market abuse prevention
• Supervises insurance distribution rules and intermediary conduct

4.3 2024-2025 Strategic Priorities

The ACPR announced its work program for 2025 emphasizing four main axes:

1. Monitoring risk evolution — Early identification and surveillance of emerging risks to financial sector stability (economic uncertainty, geopolitical risks, climate transition)
2. Risk-based approach and simplification — Developing proportionate, risk-sensitive supervision while reducing unnecessary compliance burden on smaller entities
3. Proactive sector support and structural vulnerability reduction — Supporting financial sector adaptation to regulatory change and reducing long-term risks (e.g., insurance concentration, funding cost increases)
4. Misconduct and AML/CFT strengthening — Enhanced supervision of conduct risks, operational resilience, and AML/CFT effectiveness

6.1 Supervisory Scope

The ACPR supervises compliance with AML/CFT obligations under:

• Article L. 561-36 et seq. of the CMF — Defines ACPR's AML/CFT monitoring role
• EU Anti-Money Laundering Directives (AMLD5, AMLD6)
• Financial Action Task Force (FATF) Recommendations — International standards incorporated into EU/French law

Regulated persons under ACPR AML/CFT supervision:

• Credit institutions (banks)
• Payment institutions
• Electronic money institutions
• Insurance companies
• Investment firms
• Collective investment undertakings
• Mutual insurers and mutual associations

6.2 AML/CFT Examination Methodology

Off-Site Supervision

• Detailed AML/CFT questionnaires requiring documentation and evidence
• File reviews and sanctions history analysis
• Risk assessment based on entity's business model, customer base, and geographic exposure

On-Site Inspections

• Physical examination of compliance systems and controls
• Testing of customer due diligence (CDD) and enhanced due diligence (EDD) processes
• Assessment of suspicious activity reporting procedures
• Evaluation of beneficial ownership identification systems
• Review of training and governance

6.3 AML/CFT Requirements Enforced

• Customer Due Diligence (CDD) — Know-your-customer (KYC) verification, beneficial ownership identification
• Beneficial Ownership Transparency — Identification and verification of natural persons with ultimate control
• Suspicious Activity Reporting (SAR) — Reporting to TRACFIN (French Financial Intelligence Unit) within stipulated timeframes
• Transaction Monitoring — Systems to detect and report potentially suspicious patterns
• Sanctions Compliance — Screening against OFAC, UN, EU, and French sanctions lists
• Cross-Border Transfer Rules — Complete originator and beneficiary information on payments
• Correspondent Banking Controls — Due diligence on foreign financial institutions
• Staff Training — Regular AML/CFT compliance training for all relevant employees
• Record-Keeping — Documentation and retention of CDD, transaction records for 5-10 years

6.4 2024 Enforcement Activity

• ACPR conducted targeted AML/CFT inspections across multiple sectors
• Sanctions imposed for inadequate AML/CFT systems and controls
• Emphasis on third-party risk management and complex ownership structures
• Enhanced focus on emerging digital asset service providers combining payment and crypto services

7. Regulatory Guidance & Expectations Documents

The ACPR regularly issues binding guidance through:

7.1 Instruction Documents (Instructions)

Binding supervisory instructions on specific compliance areas, including:

• Capital adequacy calculation procedures
• Liquidity risk management
• Interest rate risk assessment
• Governance and organization of credit institutions
• AML/CFT compliance
• Operational resilience

Notable 2024-2025 documents:

• Instruction 2024-I-18 (and regular updates) — Supervisory guidance on credit institutions
• AML/CFT Questionnaires — Detailed examination requirements

7.2 Recommendations (Recommandations)

Non-binding guidance on best practices, including:

• Insurance distribution practices
• Digital finance and emerging risks
• ESG (Environmental, Social, Governance) integration
• Client protection in investment services

Example: ACPR Recommendation 2023-R-01 (July 17, 2023) — Guidance on distribution of unit-linked life insurance policies

7.3 Expectations Documents (Attentes)

Detailed expectations for specific business models or emerging sectors. Recent examples include:

• Crypto-asset service providers offering payment services (2024) — Expectations for entities combining cryptocurrency and payment service activities, addressing stablecoin regulation
• Fintech start-ups — Proportionate requirements for smaller payment and EMI operators
• Open banking and PSD2 implementation — Expectations for payment initiation service providers and account information service providers

7.4 Supervisory Dialogues

• Regular bilateral supervisory meetings with significant institutions
• Thematic reviews across industry sectors
• Data collection through ACPR Portal (mandatory as of Dec 2024 for insurers, Feb 2025 for banks)

9. Data Management & Supervisory Portals

9.1 ACPR Portal (Portail ACPR)

Mandatory digital gateway for communications and regulatory reporting:

• Insurance and reinsurance entities: Mandatory use as of December 2, 2024
• Banking institutions: Mandatory use as of February 3, 2025
• Payment institutions and EMIs: Encouraged use; full compliance requirements being finalized

Portal Functions:

• Submission of authorization applications
• Regulatory reporting and data submission
• On-site inspection coordination
• Document exchange with ACPR
• Status tracking of applications and inspections

Access: Through secure credentials with role-based permissions

9.2 Data Collection Standards

• XBRL Taxonomy — Structured financial reporting format for capital adequacy, liquidity, and credit risk data
• AML/CFT Questionnaires — Detailed structured questionnaires for compliance data
• Harmonized Templates — EU-wide regulatory technical standards (RTS) for reporting consistency

10. Payments Relevance: Critical Functions

10.1 Binding Authority for Payment Professionals

For payment institutions, EMIs, payment service providers, fintech operators, and money transmitters in France:

1. Licensing requirement — ACPR authorization is mandatory to legally provide payment services
2. Ongoing prudential compliance — Capital, liquidity, fund safeguarding, operational resilience
3. Conduct of business rules — Consumer protection, disclosure, complaint handling
4. AML/CFT supervision — Binding compliance requirements with on-site and off-site examination
5. Resolution authority — ACPR intervention in case of insolvency or systemic risk

10.2 Payment Service Licensing Timeline

10.3 Capital & Fund Safeguarding Requirements

For Payment Institutions

• Initial capital: €20,000 minimum
• Operating expense ratio (OER): 2.5% of revenues or €150,000 annually (whichever is greater)
• Capital ratio: 8% of weighted operational risk for standard PIs; higher for complex models
• Fund safeguarding: 100% segregation or insurance/guarantee covering client money held

For Electronic Money Institutions

• Initial capital: €1 million minimum
• Capital ratio: 2% of e-money liabilities (standard), higher for complex models
• Fund safeguarding: 100% segregation or equivalent guarantee
• Redemption guarantee: Must guarantee redemption of outstanding e-money at any time

10.4 Critical Compliance Areas for Payment Entities

1. Customer Due Diligence (CDD)

• Identity verification of natural and legal person customers
• Beneficial ownership identification
• Purpose and nature of business relationship
• Ongoing monitoring throughout relationship

1. Suspicious Activity Reporting (SAR)

• Internal flagging and investigation procedures
• Reporting to TRACFIN (French FIU) for suspected money laundering or TF
• No "tipping off" — cannot inform customer of SAR
• Documentation and record-keeping

1. Sanctions Screening

• Real-time screening against OFAC, UN, EU, and French sanctions lists
• Blocking or freezing of transactions when matches detected
• Reporting to TRACFIN of frozen funds

1. Operational Resilience

• Business continuity and disaster recovery plans
• Cybersecurity risk management
• Third-party service provider oversight
• Incident reporting for critical operational incidents

1. Transaction Monitoring

• Automated systems to detect suspicious transaction patterns
• Investigation and escalation procedures
• Threshold alerts for large transactions
• Structuring detection (breaking large sums into smaller amounts to evade reporting)

1. Documentation & Retention

• Retention of CDD documentation for minimum 5 years post-relationship
• Transaction records and audit trails for minimum 5-10 years
• AML/CFT policy and procedure documentation

12. Recent Regulatory Developments (2024-2025)

12.1 Payment & Fintech Sector

• Crypto-asset regulation — ACPR issued expectations (Attentes) for payment service providers combining payment and crypto-asset services (2024), addressing stablecoin regulation and operational risks
• Open banking and third-party providers — Continued supervision of PSD2-compliant payment initiation and account information service providers
• Simplified payment institutions — Clarified proportionate requirements for operators with <€3 million monthly payment volumes
• ACPR Portal mandatory adoption — Banking reporting via portal mandatory as of Feb 2025; payment institutions transition underway

12.2 Insurance Sector (Relevant to Broader Regulatory Landscape)

• IRRD implementation — ACPR preparing implementation of EU Insurance Recovery and Resolution Directive (adopted April 2024), expected enforcement 2025-2026
• Solvency II review — Proposed EU amendments to Solvency II directive (expected 2025-2026) affecting capital requirements and governance

12.3 AML/CFT Enhancements

• AMLD6 implementation — Full transposition of EU's 6th Anti-Money Laundering Directive into French law (ongoing 2024-2025)
• Enhanced due diligence — Increased focus on beneficial ownership transparency and complex ownership structures
• Digital asset service providers — Heightened scrutiny of AML/CFT systems for fintech and crypto-adjacent payment providers
• Cross-border transfer rules — Strict enforcement of full originator and beneficiary information on international payments

12.4 Operational Resilience & Cybersecurity

• Digital Operational Resilience Act (DORA) — Implementation of EU's DORA requirements (expected 2024-2025) for ICT risk management, third-party service provider oversight, and incident reporting
• Cyber incident reporting — Mandatory reporting of material cyber incidents to ACPR and French cybersecurity authority (ANSSI)

14. Glossary of French Regulatory Terms

Regulatory Powers

8.1 Sanctions Powers

The ACPR Sanctions Commission has authority to impose:

• Administrative fines — Up to €5 million or 10% of annual turnover (whichever is greater) for serious violations
• Withdrawal of authorization — License revocation for systemic breaches
• Cease-and-desist orders — Mandatory cessation of unlicensed activities
• Remediation orders — Requirements to correct compliance failures
• Publication of sanctions — Public disclosure of enforcement actions (name-and-shame effect)

8.2 2024 Enforcement Trends

• Total sanctions: ~€5 million across multiple enforcement actions
• Focus areas:
• AML/CFT compliance failures (non-reporting of suspicious activities, weak KYC systems)
• Operational governance weaknesses
• Conduct of business rule violations
• Inadequate capital or fund safeguarding
• Trend toward increased scrutiny of fintech and payment sector entities

8.3 Appeal Procedures

Entities subject to ACPR sanctions may appeal to:

• French Court of Appeals (Cour d'appel) — First appeal on administrative law grounds
• French Court of Cassation (Cour de cassation) — Final appeal on procedural matters

Regulatory Role and Function

3.1 Leadership

• Chairman (Président) — The Governor of the Banque de France (ex officio)
• As of 2024, this is François Villeroy de Galhau
• Secretary-General (Secrétaire Général) — Chief executive officer responsible for day-to-day management and strategic direction
• College (Collège) — Decision-making body for supervisory and administrative matters:
• 5 members: Chairman, Secretary-General, 3 appointed members (including at least one senior regulator from the Banque de France)
• Issues supervisory decisions, authorizations, instructions, and recommendations
• Sanctions Commission (Commission des sanctions) — Independent disciplinary body:
• Composed of judges and senior officials
• Imposes sanctions for regulatory violations
• Notable: In 2024, ACPR sanctions totaled approximately €5 million across various enforcement actions

3.2 Staff Composition

• Total staff: 1,008 employees (as of 2024)
• Divisions: Banking supervision, insurance supervision, AML/CFT supervision, licensing and authorization, resolution, legal affairs, market coordination

3.3 Physical Presence

• Headquarters: 4 Place de Budapest, CS 92459, 75436 Paris CEDEX 09, France
• Operational centers: Integrated within Banque de France facilities in Paris
• Regional presence: Through Banque de France regional networks for on-site examinations

Legal Foundation

Established by primary legislation enacted by the national legislature. The enabling statute defines the regulatory mandate, scope of authority, governance structure, and enforcement powers. The entity was established in 2010.

Licensing and Authorization Relevance

5.1 Payment Institutions (Établissements de paiement)

Regulatory Basis: Article L. 314-1 and following of the CMF

Definition: Any legal entity (other than a credit institution) that habitually provides payment services.

Licensing Process:

1. Applicant submits comprehensive authorization application to the ACPR
2. ACPR conducts technical assessment of:

• Governance and organizational structure
• Fit-and-proper status of key personnel (directors, senior management)
• Business plan and financial projections
• Risk management framework
• Compliance program (AML/CFT, conduct rules)
• Technology and operational resilience
• Fund safeguarding arrangements

1. ACPR consults with Banque de France
2. Decision timeline: 3 to 6 months from receipt of complete application:

• 3 months for payment institutions
• 6 months for credit institutions applying for payment authorization

Minimum Capital Requirements:

• Standard payment institutions: €20,000 initial capital
• Simplified payment institutions (under €3 million monthly average payment volume): €20,000 initial capital
• Capital ratio requirements based on transaction volumes and services provided

Fund Safeguarding:

• Payment institutions must either:
• Hold client funds in segregated accounts with credit institutions, OR
• Obtain insurance/guarantees covering 100% of client funds held

Payment Services Covered:

• Cash deposit and withdrawal services
• Payment account management services
• Execution of payment transactions (card payments, bank transfers, direct debits)
• Payment initiation services (open banking initiators under PSD2)
• Account information services

Exemptions: The ACPR College may grant exemptions for payment services limited to:

• Single merchant networks (only that merchant's customers)
• Closed-loop cards or vouchers
• Limited goods/services scope (e.g., transportation passes)

5.2 Electronic Money Institutions (EMIs)

Regulatory Basis: Article L. 521-1 and following of the CMF

Definition: Any legal entity that issues electronic money (stored monetary value on a chip card or computer memory representing a claim on the issuer).

Licensing Process: Similar to payment institutions with additional focus on:

• Money transmission security
• Anti-counterfeiting measures
• Redemption guarantees
• Fund safeguarding (same requirements as payment institutions)

Minimum Capital:

• €1 million initial capital
• Capital ratio requirements based on e-money liabilities

Services Covered:

• Issuance of electronic money (e-money cards, digital wallets)
• Transmission of funds (when combined with payment services)
• Account management for e-money funds

Payments and Money Movement Relevance

The YAML FRONT MATTER has the following relevance to payments and money movement in France:

Payment Systems Governed or Overseen

The YAML FRONT MATTER has the following relationship to payment infrastructure in France:

This entity's role in payment systems is primarily regulatory and supervisory rather than operational. It does not directly operate national payment infrastructure but contributes to the regulatory framework governing payment activities in France.

Relationship to Other Regulators

The YAML FRONT MATTER operates within France's broader financial regulatory architecture and maintains relationships with:

Geography and Jurisdiction Notes

Important Departments and Divisions

Key Public Resources

Notes on Naming and Language